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Table of Contents

1.6 Implications for Tribes and U.S. Territories........................................................................ 2

1.7 Endangerment finding.......................................................................................................... 39

1.8 Building blocks 2, 3, and 4: Intra-state and inter-state compliance................................. 45

1.9 Potential combinations of the building blocks as components of the BSER ................... 50

1.9.1 Proposed BSER - combination of all four building blocks as the BSER...................... 50

1.9.2 Alternate approach to the Best System of Emission Reduction .................................... 63

1.9.3 Evaluation of Building Block 1, heat rate improvements, against the BSER criteria. 81

1.9.4 Evaluation of Building Block 2, re-dispatch, against the BSER criteria ...................... 97

1.9.5 Evaluation of Building Block 4, increased demand-side energy efficiency, against the 

BSER criteria ................................................................................................................ 123

1.9.6 Other ................................................................................................................................. 131

1.10 Determination of the BSER.............................................................................................. 132

1.10.1 Statutory and regulatory provisions related to determination and application of the 

BSER.............................................................................................................................. 132

1.10.2 The interconnected nature of the U.S. electricity sector ............................................ 145

1.10.3 Additional considerations related to inclusion of building blocks 2, 3, and 4 as part of 

the basis supporting the BSER: "system of emission reduction" ............................ 152

1.10.4 Additional considerations related to inclusion of building blocks 2, 3, and 4 as part of 

the basis supporting the BSER: "best" system that is "adequately demonstrated"

......................................................................................................................................... 165

1.10.5 The EPA's discretion in applying the criteria for the best system of emission 

reduction ........................................................................................................................ 189

1.10.6 State-wide Application of the BSER; Appropriateness of Standards of Performance

......................................................................................................................................... 202

1.10.7 Severability ..................................................................................................................... 229

1.10.8 Achievability................................................................................................................... 236

1.10.9 BSER based on emissions trading ................................................................................ 256

1.10.10 BSER based on emissions averaging.......................................................................... 264

1.10.11 Other ............................................................................................................................. 264
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1.6 IMPLICATIONS FOR TRIBES AND U.S. TERRITORIES

Comment 1: Commenters stated they agree with EPA's decision to exclude existing electric 

generating units ("EGUs") located on tribal lands from the Carbon Pollution Emission 

Guidelines for Existing Stationary Sources: Electric Generating Units; Proposed Rule 

published for the states on June 18, 2014 ("Proposed Rule for the States"). See 79 Fed. Reg. 

34844 ("Although affected EGUs located in Indian country operate as part of the interconnected 

system of electricity production and distribution, those EGUs would not be encompassed within 

a state's CAA section 111(d) plan. Instead, commenters stated, a tribe that has one or more 

affected EGUs located in its area of Indian country would have the opportunity, but not the 

obligation, to establish a plan that establishes standards of performance for CO2 emissions from 

affected EGUs for its tribal lands.") ) Commenters agreed that the correct approach was for 

EPA to promulgate a supplemental rule for tribes and U.S. territories. 

Commenters stated EPA proposes to set interim and final carbon dioxide "goals" for the 

reservation using the same building block methodology that EPA used in its main Section 111(d) 

proposal. Commenters explained that as set forth in Commenters' Prior Comments and the 

comments of numerous other organizations, notably those of the National Rural Electric 

Cooperative Association (NRECA), EPA does not have authority to regulate EGUs under 

Section 111(d) and, in any event, EPA's proposed approach to regulation, including its building 

block methodology, is fundamentally flawed. Commenters stated that for those reasons, EPA's 

Supplemental Proposal is similarly flawed.

Response 1: The EPA agrees with the commenters that it was the best approach to issue a 

supplemental proposal addressing EGU located in areas of Indian country and U.S. territories.

With regard to commenters’ contention that EPA lacks the necessary legal authority to regulate 

EGU under section 111(d) of the Clean Air Act, as explained in detail in section IV.A of the 

preamble to the final rule, EPA strongly disagrees.

Comment 2: Commenters stated EPA has proposed using the same four building block approach 

to set emission reduction targets for power plants in Indian Country and U.S. Territories. 

Commenters agreed that EPA should use the same approach to setting targets in these areas as it 

follows in states.

Response 2: The EPA agrees with the commenters that it should generally be consistent in its 

approach to setting emission reduction targets particularly with regard to EGU that operate as 

part of the interconnected system of electricity production and distribution. Consistent with this 

approach, in this final rulemaking EPA is finalizing three building blocks as part of the best 

system of emission reductions (BSER) for EGU be they located in states, Indian country or U.S. 

Territories. For more information on how the EPA has defined BSER in this final rule, please see 

section V of the preamble to the final rule.
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Comment 3: Commenters stated Indian Tribes are affected much differently than the rest of the 

nation as their cultures are integrated into the ecosystems of North America; and many Tribal 

economies are heavily dependent on the use of fish, wildlife, and native plants. Commenters 

explained even where Tribal economies are integrated into the national economy, Tribal cultural 

identities continue to be deeply rooted in the natural environment. Commenters stated as climate 

change disrupts biological communities, the survival of some Tribes as distinct cultures may be 

at risk. Commenters concluded the loss of traditional cultural practices, due to climate-driven 

die-off or range shift of culturally significant plant and animal species, may prove to be too much 

for some Tribal cultures to withstand on top of other external pressures that they face.

Commenters stated that climate-driven disruption of biological communities is having a 

considerable effect on the treaty rights of Indian Tribes. Commenters stated many such treaties 

preserve hunting, fishing, and gathering rights for Tribes on their lands and in the usual and 

accustomed areas. Commenters stated some Tribes are finding that the animals and/or plants on 

which they depend for their cultural practices and identity have either migrated to lands not 

under their control or have disappeared altogether. Commenters asked "how does one begin to 

value this type of loss for a Tribe" Further, commenters stated CO2 emitted today can remain in 

the atmosphere up to 100 years, meaning that the full impacts of these emissions on Tribes and 

their culture may not be seen until many years into the future. Commenters stated the TEPC 

recognizes that the Proposed Rule is a positive action towards reducing uncontrolled CO2 

emissions. Commenters stated the emission of CO2 and other GHGs must stop in order to protect 

Indian Tribes and their cultures, not only for current generations, but also for future generations 

to come.

Response 3: The EPA agrees with the commenters that because of their unique circumstances 

tribes are likely to be impacted differently by climate change when compared to the general 

population. However, as noted in section IX of the preamble to this final rule, the EPA believes 

that the final rule will benefit all communities, including indigenous populations, by reducing not 

only CO2 emissions, but also emissions of conventional pollutants. For more detailed 

information on the benefits of the final rule, see sections IX, XII.F and XII.J of the preamble.

Comment 4: Commenters stated that in the event that Fort Mojave does not develop its own 

plan, EPA should find that it is not necessary or appropriate to develop a federal plan unless such 

a plan provided the same flexibilities afforded to states by the CPP. Commenters explained that 

the TAR provides significant discretion to EPA to determine whether promulgating such a 

Federal Implementation Plan ("FIP") is necessary or appropriate to protect air quality.(Arizona 

Pub. Serv. Co. v. EPA, 562 F.3d 1116, 1125 (10th Cir. 2009) (stating that 40 CFR section 

49.11(a) "provides the EPA discretion to determine what rulemaking is necessary or appropriate 

to protect air quality and requires the EPA to promulgate such rulemaking")) In this case, 

commenters stated EPA should find that the broader goals of the Clean Power Plan will be 

achieved without imposing specific emission performance goals on Fort Mojave because South 

Point will be optimally dispatched to decrease power-sector GHG emissions pursuant to 

surrounding states' implementation of the Clean Power Plan without imposing any specific 

requirements on South Point via a FIP. Commenters offered, for example, a significant portion of 

South Point's power is currently delivered to California, where it is subject to a compliance 
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obligation under California's Cap-and-Trade Regulation. Commenters stated other states served 

by South Point might similarly be expected to implement mass-based programs as a result of 

implementation of the Clean Power Plan. Commenters stated as a consequence, a significant 

portion, if not all, of South Point's GHG emissions will appropriately be priced into dispatch 

decisions, obviating any source-specific controls that might be applied through a FIP imposed by 

EPA upon Fort Mojave and South Point alone. Commenters summed, EPA should not impose 

federal requirements on Fort Mojave unless the flexibility otherwise built into the Clean Power 

Plan for states and affected EGUs could somehow be made available to Fort Mojave and South 

Point. Commenters stated South Point is the only facility with affected EGUs on Fort Mojave 

tribal lands and, as a consequence, there are no opportunities to achieve reductions through redispatch of a larger existing fleet. Commenters further stated, imposition of RE and EE targets 

for Fort Mojave would be unreasonable, given the small electricity demand that Fort Mojave 

represents relative to the capacity of South Point. Thus, commenters added, there are little to no 

opportunities for reductions to be achieved by Fort Mojave alone. Indeed, commenters asserted, 

the total required reduction from the 2012 baseline rate to the final goal for Fort Mojave amounts 

to less than 1%, in comparison to the 52% and 23% reductions required of its neighbors, Arizona 

and California (respectively). Commenters stated that for EPA to impose a FIP on Fort Mojave 

in pursuit of such negligible reductions would represent an unnecessary administrative burden, 

with no emissions reduction benefit to justify such an intrusion into tribal sovereignty.

Commenters agreed with EPA's determination that tribes which have EGUs located on their 

lands, like the Navajo Nation, should have the opportunity, but not the obligation, to establish 

their own Clean Air Act Section 111(d) plans ("111(d) plan") if they so choose.(79 Fed.Reg. 

34844).

Response 4: The EPA agrees that the language in the tribal air rule (TAR) requiring EPA to 

promulgate such federal implementation plans (FIP) as it determines are necessary or appropriate 

to protect air quality in areas of Indian country provides it with considerable discretion. The 

EPA also agrees with commenters that tribes with EGU on their land should have the 

opportunity, but not the obligation, to establish their own Clean Air Act section 111(d) plans if 

they so choose. EPA notes that a tribe wishing to establish such a plan would also need to apply 

to EPA for treatment-in-the-same-manner-as-a-state status for that purpose under EPA’s 

regulations at 40 CFR part 49. For a more detailed discussion of this issue, please see section 

II.H and XII.F of the preamble to the final rule.

Comment 5: Commenters believed the Clean Power Plan should allow Tribal 111(d) 

plans. Commenters stated that the Navajo Nation reserves its right to implement a tribal 111(d) 

plan. (79 FR 65495), and the Navajo Nation also reserves its right to request approval of 

reasonably severable partial program elements (Id.). Commenters continued, stating that 

although EPA did not make any finding as to whether individual tribes with affected EGUs have 

the legal authority to implement a tribal 111(d) plan, the Navajo Nation believes it may have the 

legal authority to do so. Commenters stated if for whatever reason the Navajo Nation does not 

implement a tribal 111(d) plan, the Navajo Nation will request that EPA should implement a 

federal 111(d) plan for the Navajo Nation. Either way, commenters remarked, there should be a 

plan, and EPA should not allow the two plants located on the Navajo Nation to be unregulated. 
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Commenters also noted that if the Navajo Nation decides not to develop its own 111(d) plan, the 

Navajo Nation believes that EPA should adopt a 111(d) plan for the Navajo Nation, explaining 

that a federal plan would ensure that air quality on the Navajo Nation is protected by regulating 

CO2 emissions from the power plants located on the Navajo Nation. Commenters stated it would 

also better position the Navajo Nation government to participate in any carbon trading program 

that is eventually established, whether in the United States or internationally. Commenters stated

that the Navajo Nation is a uniquely disadvantaged people, and any revenue generated from a 

carbon trading program would significantly benefit the Navajo Nation's economy. 

Commenters stated that specifically, tribes with designated facilities must have the choice of 

"tribe as State" status: and indeed EPA proposes that and offers geographically-limited, ratebased, emissions goals for the U.S territories and tribal lands with designated facilities: Puerto 

Rico and Guam, and tribal lands of the Navajo Nation (located within Arizona and New 

Mexico), of the Ute Tribe of the Uintah and Ouray Reservation (located within Utah) and lands 

of the Fort Mojave Tribe (located within Arizona).[14 SNPRM, 79 Fed. Reg. at 65,484]

Commenters supported the flexibility of CAA Section 111(d) for states and tribes to use their 

discretion to develop plans to achieve the emission reductions, whereby the EPA reviews plans 

to ensure they are meeting the relevant statutory criteria. Commenters provided the following 

recommendations: 1) that the EPA work closely with local, state and tribal governments to 

identify innovative state, local and tribal programs which achieve these reductions; 2) that the 

EPA share these approaches for other programs to potentially adopt. At the state and local level 

we learn from each other and this will provide a means to access this information readily; and, 3)

that the EPA work closely with the states and tribes to engage with local governments to employ 

innovative collaborations with their public utilities and the private sector to promote these 

reductions.

Response 5: In the final rule, the EPA is finalizing emission performance rates for the EGU 

located in Indian country and mass- and rated-based performance goals for each of the three 

affected areas of Indian country that were derived using the same methodology (the application 

of BSER) as was used to derive goals for EGU located outside of Indian country. Commenters 

are correct that under 40 CFR 49.3, 49.6 and 49.7, collectively, tribes with EGU located in their 

areas of Indian country may seek treatment in the same manner as a state eligibility for purposes 

of developing a tribal implementation plan (TIP) implementing the final Emission Guidelines. 

The EPA would evaluate any such request consistent with the criteria in 40 CFR 49.6 and 49.7, 

taking into consideration all relevant information. If EPA approves the request, the tribe would 

be free to submit a TIP to EPA for approval. In determining whether to approve any such TIP, 

EPA would evaluate it against the final Emission Guidelines, considering all relevant 

information. While the EPA has the authority under CAA §§301(a) and 301(d)(4) and 40 CFR 

49.11 to establish a federal implementation plan (FIP) implementing the Emission Guidelines in 

areas of Indian country with EGU, the exercise of this authority is conditioned on EPA first 

proposing and then finalizing a determination that a FIP is “necessary or appropriate”. The EPA 

did not propose such a finding in conjunction with the supplemental proposal and, therefore, is 

not finalizing such a finding in conjunction with the final rule. For further discussion of tribes’ 

with EGU located in their areas of Indian country opportunity, but not obligation, to develop 

their own section 111(d) plans, please see sections II.H and XII.F of the preamble to the final 

rule.
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Comment 6: Commenters supported EPA's recognition of a tribe's right to seek "treatment as a 

state" (TAS) to implement its own 111(d) plan and to apply for EPA approval of that plan. CAA 

section 30l(d)(2) required EPA to specify those provisions of the CAA for which it is appropriate 

to treat tribes as states, which EPA did in the Tribal Authority Rule (TAR). 40 C.F.R. Part 49. 

Commenters continued, stating that in the TAR, at 40 C.F.R. Section 49), EPA found that TAS is 

appropriate for all provisions of the CAA except those specifically listed in section 49.4 as being 

excluded; the only exclusions are program deadlines and accompanying sanctions for failures to 

meet those deadlines (since it is not mandatory for a tribe to seek TAS), criminal authority 

requirements (due to limits on tribal criminal jurisdiction), and certain grant provisions. 

Commenters stated the Navajo Nation may therefore seek TAS to implement its own 111(d) 

plan. At the same time, commenters remarked, CAA section 301(a) and (d)(4) provide EPA with 

ample authority to develop and implement a 111(d) plan for the Navajo Nation in the event that 

the Navajo Nation does not implement its own plan, and the federal plan may differ from a state 

plan if necessary or appropriate. Commenters stated CAA section 301(a) authorizes the EPA 

Administrator to prescribe "such regulations as are necessary" to carry out her functions under 

the CAA, and CAA section 301(d)(4) states: "In any case in which the Administrator determines 

that the treatment of Indian tribes as identical to States is inappropriate or administratively 

infeasible, the Administrator may provide, by regulation, other means by which the 

Administrator will directly administer such provisions so as to achieve the appropriate purpose'' 

(emphasis added). Commenters stated that pursuant to this statutory authority EPA promulgated 

section 49.11(a) of the TAR, which requires the promulgation of a federal plan whenever 

"necessary or appropriate to protect air quality" if a tribe fails to submit a tribal plan or submits 

an inadequate tribal plan. Commenters added that section 49.5 of the TAR allows a tribe to 

request a finding from EPA that it would be inappropriate to treat tribes as states for particular 

provisions of the CAA. Commenters stated the "other means" referenced in CAA section 

301(d)(4) could include a federal 111(d) plan, and such a plan could differ from state 

plans. Commenters stated EPA has the power and flexibility to develop a 111(d) plan for the 

Navajo Nation that is specific to the Navajo Nation's needs, consistent with the framework 

described in Section II of these comments, regardless of the approach taken by any state 

developing a 111(d) plan. Commenters stated EPA's authority to treat tribes differently than 

states is rooted in principles of federal Indian Law, is reflected in CAA section 301(d), and was 

recognized by EPA in its development of the TAR. Commenters stated under federal Indian law, 

"[t]he federal government has substantial trust responsibilities toward Native Americans." 

Commenters stated the legislative history of CAA section 301(d) indicates that this provision 

incorporates federal responsibilities toward tribes. Commenters stated EPA recognized its 

obligations to tribes when it developed the TAR. Further, commenters added, EPA already 

provides states flexibility in the development of state 111(d) plans, and structuring the Navajo 

Nation's plan to reflect unique circumstances on the Nation would take the same approach. 

Response 6: The EPA agrees with the commenters that it has the necessary authority under CAA 

§§301(a) and 301(d)(4) and 40 CFR 49.11 to promulgate a federal implementation plan (FIP) 

implementing the final Emission Guidelines in areas of Indian country with EGU if it determines 

that it is “necessary or appropriate” to do so. The EPA also agrees that it has considerable 

discretion in determining the timing of adopting a FIP. While the EPA has flexibility in 

determining the “necessary or appropriate” elements of such a plan, any such plan would be 
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consistent with the requirements of the final Emission Guidelines. EPA notes that the Agency 

could determine that some plan elements are severable and that it is not “necessary or 

appropriate” to initially address those elements in the FIP. For a further discussion of some of 

these issues, please see section II.H and XII.F of the preamble to the final rule.

Comment 7: Commenters stated that because the areas that will be subjected to this proposal 

had no utility-scale, non-hydroelectric renewable energy (RE) in 2012, U.S. EPA is proposing 

multiple options to address RE generation under Building Block 3. [79 FR 65491] Commenters 

continued (verbatim), the first option follows the methodology of the June 18, 2014 proposal 

which results in goals with zero RE requirements under Building Block 3; option two assumes 

there is RE potential in U.S. Territories. [79 FR 65491] Commenters stated for U.S. Territories, 

U.S. EPA assumes RE in 2017 to be 0.37% which is consistent with the lowest amount among 

the 50 states in 2012 (Kentucky). Commenters stated U.S. EPA did not make this same 

assumption for Indian Country because it would have resulted in a significant portion of the 

area's electricity demand being met by renewables only. U.S. EPA is also proposing an 

alternative for Puerto Rico based on a similar methodology from the June 18, 2014 proposal for 

the alternative RE approach that relies on technical potential within the states. However, 

commenters added, U.S. EPA acknowledges they have very limited information on Puerto Rico's 

technical potential. Commenters stated U.S. EPA did not provide this alternative for Guam 

because U.S. EPA does not have any technical potential data for Guam. Commenters stated 

when using a methodology similar to the June 18, 2014 proposal, U.S. EPA found similar 

problems when applying Building Block 4 in these areas. [79 FR 65492] Commenters added 

there is no projected retail electric sales growth available from the 2012 Annual Energy Outlook 

(AEO) for U.S. Territories and therefore, is using 0%. Commenters also stated in Indian County, 

sales of electricity is small compared to the total generation and therefore, application of 

Building Block 4 yields very little emission reductions. 

Response 7: The commenters question the EPA’s decision to include RE in building block three. 

The EPA (add in response from other comments regarding RE). In addition, the commenters

state that the application of Building Block 4 yields very little emission reductions. As noted, in 

the section V of the preamble for this final rulemaking, the EPA is not including Building Block 

4 in the determination of BSER. 

Comment 8: Commenters stated that the Navajo Nation agrees that the emission reduction rate 

set by EPA should be for the Navajo Nation, and not the individual power plants located on the 

Navajo Nation. Commenters explained that such an approach is consistent with the state-specific 

rate set by EPA under the Proposed Rule and with states being required to develop state-specific 

plans (rather than plans for individual sources) under CAA section 111(d), and that setting an 

emissions rate for the Navajo Nation, and not the power plants, is also permissible given the 

flexibility afforded to EPA through CAA section 301(d) and the TAR.

Commenters stated Section 49.11 of the TAR authorizes EPA to promulgate a FIP when EPA 

determines such regulations are "necessary or appropriate" to protect air quality. 40 CFR 

49.11(a) . . . The Court of Appeals for the Tenth Circuit considered the regulatory language in 40 
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CFR 49.11(a) and concluded that "[i]t provides the EPA discretion to determine what rulemaking 

is necessary or appropriate to protect air quality and requires the EPA to promulgate such 

rulemaking." Commenters stated that the Navajo Nation has given up its ability to regulate NGS 

including air emission and was illegal to be part of the Technical Work Group (TWG). 

Commenters stated Navajo Nation is not eligible for TAR according to 40 CFR section 49. 

Commenters added Tribal eligibility requirements which is part of the Navajo Nation lease 

agreement with SRP.

Response 8: In the final rule, EPA is establishing emission performance rates for each individual 

EGU, including the four EGU located in Indian country, as well as mass- and rate-based 

performance goals for each state or other relevant geographic area. The EPA agrees that section 

49.11 of the TAR authorizes it to promulgate a FIP, including a FIP implementing the final 

Emission Guidelines, if it determines that this is “necessary or appropriate” to protect air quality. 

The EPA did not propose such a finding in conjunction with the supplemental proposal and, 

therefore, is not finalizing one in conjunction with the final rule. Thus, the question of what such 

a FIP might entail is outside of the scope of this rulemaking. Please see sections VI and VII of 

the final rule preamble for a response to this comment.

Comment 9: Commenters stated that the Four Corners Power Plant owners' lease with the 

Navajo Nation provides that the Navajo Nation "will not directly or indirectly regulate or attempt 

to regulate the Company or the construction, maintenance or operation of the power plant and 

transmission system by the Company, or its rates, charges, operating practices, procedures, 

safety rules, or other policies or practices. . . ." Commenters explained that because the Navajo 

Nation is contractually foreclosed from regulating carbon emissions from the plant, it lacks the 

requisite authority and capability for TAS under the TAR.[See 49 C.F.R. section 49.7(a)(3), (4) 

(requiring as a prerequisite for CAA program approval a showing by the applicant tribe that it 

has the "authority to regulate air quality" and a "statement describing the capability of the 

applicant to administer effectively any Clean Air Act program for which the tribe is seeking 

approval") (emphasis added).] Commenters stated that accordingly, provided EPA determines it 

is necessary or appropriate to establish a CAA Section 111(d) plan establishing standards of 

performance for CO2 emissions from the Four Corners Power Plant, EPA itself must develop 

and implement such a plan and cannot utilize the TAS provisions. Commenters stated they fully 

support Navajo Nation involvement in the program and encourage EPA to closely coordinate 

with the Navajo Nation (with the participation of APS and SRP) to develop the federal CAA 

Section 111(d) plan for the Four Corners Power Plant and Navajo Generating Station. 

Commenters added that EPA's support of active tribal involvement and recognition of the tribe's 

desires and concerns as they relate to the implementation of a CAA Section 111(d) plan on the 

Navajo Nation would be consistent with the federal government's obligations as set forth in 

Executive Order 13175. [O. 13175, 65 Fed. Reg. 67249, 67249 (Nov. 6, 2000) (recognizing 

federal government's "unique legal relationship with Indian tribal governments" and right of 

Indian tribes to self-government and tribal sovereignty and self-determination).]

Response 9: To date, the Navajo Nation has not expressed a clear intent to seek TAS approval 

for purposes of administering a tribal implementation plan implementing the final Emission 

Guidelines, much less submitted an application seeking such approval. As a result, the 
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commenters’ comment concerning any potential limitations on the tribe’s ability to obtain TAS 

are premature and thus outside the scope of the final rule. The EPA agrees that it has the 

authority to establish a federal plan implementing the final Emission Guidelines on the Navajo 

Nation if it determines that such a plan is “necessary or appropriate” to protect air quality. The 

EPA did not propose such a finding in conjunction with the supplemental proposal and, 

therefore, is not finalizing one in conjunction with the final rule. The EPA will fully comply 

with Executive Order 13175 in conjunction with proposing any such finding, as well as in the 

development of any federal implementation plan following the finalization of any such finding 

should it make one in the future.

Comment 10: Commenters believed EPA's identification of "Best System of Emission 

Reduction" for the coal plants located on the Navajo Nation is inadequate, arbitrary, and 

capricious. Commenters elaborated (verbatim) 

1) Building Block 1: EPA must mandate a 6% heat rate improvement at each operating unit at 

Four Corners Power Plant and NGS. Under building block 1 of the CPP, EPA has generally 

assumed that under coal plants can achieve a 6% heat rate improvement. At a minimum, EPA 

should stringently apply this requirement to all operating units at FCPP and NGS. EPA should 

also give full consideration to whether greater heat rate improvements can and should be 

achieved at the plants. EPA has already determined that implementation of all operational and 

maintenance best practices ("O&M") together with equipment upgrades identified in a 2009 

study by the engineering firm Sargent & Lundy, can provide total heat rate improvements at 

coal-fired power plants of up to 12%.[EPA, Carbon Pollution Emission Guidelines for Existing 

Stationary Sources: Electric Utility Generating Units, Proposed Rule, 79 Fed Reg. 34830, 34859 

(June 18, 2014).] These best practices and equipment upgrades include common-sense measures 

such as turning off unneeded pumps at reduced loads, installation of digital control systems, 

more frequent tuning of existing control systems, and earlier like-kind replacement of worn 

components. EPA also determined a high and sustained correlation between the implementation 

of equipment upgrades and actual heat rate performance data. [Id. at 34860] While 

[Commenters] understand that not all O&M best practices and equipment upgrades can be 

implemented at every plant, halving of the achievable emissions target is not justified or 

sufficiently explained. Requiring efficiency improvements through best maintenance practices 

and equipment replacements and upgrades at established intervals, rather than relying on spotty, 

infrequent and voluntary implementation of such practices, yields consistent and sustained 

results and is cost effective, and EPA should include each of these measures in BSER. 

[Commenters] also hereby incorporated the Sierra Club's comments concerning the appropriate 

BSER target for heat rate improvements to power plants. Those comments demonstrate that a 6% 

heat rate improvement is adequately demonstrated based on better O&M practices alone. Further, 

the Sierra Club comments show that plant upgrades can reduce emission rates by an additional 

4%.[As the Sierra Club comments point out, EPA agreed with the assessment by the National 

Energy Technology Laboratory that equipment upgrades yielding 4% emission reductions are 

adequately demonstrated. EPA, however, discounted this rate by half because of claimed 

uncertainty about how many plants had already performed the upgrades. As the Sierra Club 

points out, however, its own 50-unit study and published industry reports demonstrate the 

relative infrequency of such upgrades to date.] These comments support and amplify the result of 
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the Sargent & Lundy study and provide robust support for a 10% emission reduction target based 

on best O&M practices and equipment upgrades alone. 

2) Building Block 2: EPA should consider re-dispatching Four Corners and NGS using 

Concentrated Solar Power. EPA's Proposal states that since there are no natural gas power plants 

on the Navajo Nation, Building Block 2 does not provide an opportunity to offset carbon 

emissions from Four Corners and NGS. However, EPA's analysis ignores that NGS and Four 

Corners are good candidates for offsetting carbon emissions using Concentrated Solar Power 

(CSP). The National Renewable Energy Laboratory found that NGS is a "good candidate" to 

hybridize the plant by augmenting it with solar generated steam because of its excellent solar 

resource and the proximity of flat vacant land.["Navajo Generating Station and Clean-Energy 

Alternatives: Options for Renewables" Hurlburt, et al, National Renewable Energy Laboratory, 

June, 2012, page 29, available at http://www.nrel.gov/docs/fy12osti/54706.pdf (last visited 

12/15/14)] EPA should consider this option in Building Block 2.Although the possibility of solar 

augmentation and/or substitution onsite at NGS obviously requires more detailed study, it should 

not simply be dismissed out-of-hand without full consideration of its environmental costs and 

potential emissions-reduction benefits. 

3) Building Block 3: EPA's assessment of renewable energy potential on the Navajo Nation is 

arbitrary and capricious. EPA determined that there is no non-hydro utility scale renewable 

energy located on the Nation. EPA then concludes that there will be no such renewable energy 

development through 2029. EPA's analysis and methodology are arbitrary and capricious. As 

noted above, the two large coal plants on the reservation do not provide power to the Navajo 

Nation. Instead, many homes and businesses on the reservation are served by small distributed 

generation resources. These resources cannot be ignored by EPA. The extent of these resources 

should be quantified and assumed to grow at a rate of at least 6%/year, the same percentage of 

growth EPA assumes for renewable energy growth in the rest of the western United States. [79 

Fed. Reg. 65491] EPA's analysis also ignores that the Navajo Nation has some of the best solar 

resources in the entire county. The U.S. Department of Energy's National Renewable Energy 

Laboratory estimates that the solar energy resource on the Navajo Nation is capable of producing 

1,235,874 megawatts of utility scale renewable energy. NREL's report also notes that "[t]he 

Navajo Tribal Utility Authority (NTUA) is exploring the feasibility of large-scale solar, 

including possible development on a reclaimed portion of the Black Mesa coal mining 

complex.[Id. at p. 14.] In contrast, EPA's Building Block 3 analysis assumes the Navajo Nation's 

utility scale solar potential is zero. The NREL report also states that the "Navajo nation has the 

largest and the most productive developable wind resource areas. NTUA is currently assessing 

major wind projects that, in all, could amount to more than 600 megawatts of wind power."[Id. at 

p. 17.] EPA's Building Block 3 analysis also ignores this wind resource. For the reasons stated 

above, EPA's failure to accurately assess the true renewable energy potential of the Navajo 

Nation renders its proposal arbitrary and capricious.

Response 10: In the final rule, EPA establishes emission performance rates for the four EGU 

located in Indian country, including Four Corners Power Plant and Navajo Generating Station, 

and mass- and rate-based emission performance goals for each of the three affected areas of 

Indian country using the same methodology as it applied in determining the emission 

performance rates and state goals for EGU located outside of Indian country. With regard to the 
11

commenters’ concerns with building blocks 1–3, see EPA’s response to comments about the 

building blocks in section V of the preamble to the final rule. 

Comment 11: Commenters stated that the supplemental proposal provides that "EPA must 

promulgate federal plan provisions if it determines that such provisions are necessary or 

appropriate, unless a tribe on whose lands an affected source (or sources) is located seeks and 

obtains authority from the EPA to establish a plan itself." 79 Fed. Reg. at 65,489, and under 

section 301(d)(4) of the Act and section 49.11 of the TAR, EPA is required to issue a federal 

plan if a tribe fails to submit a tribal implementation plan or EPA does not approve the plan it 

submitted. Commenters noted that the statute does not authorize the "mid-step" EPA has set 

forth in the supplemental proposal; i.e., EPA's determination that such provisions are necessary 

or appropriate, and in the final TAR, EPA confirmed that the "necessary or appropriate" 

language in section 49.11 of the TAR does not confer discretion to avoid promulgating a FIP. 

Commenters continued, stating that in describing section 49.11, EPA explained that it "provides 

that the Agency will promulgate a FIP to protect tribal air quality within a reasonable time if 

tribal efforts do not result in adoption and approval of tribal plans or programs, and thus, EPA 

will continue to be subject to the basic requirement to issue a FIP for affected tribal areas within 

some reasonable time." 63 Fed. Reg. at 7265. Commenters concluded that EPA must therefore 

revise the final rule to provide that the agency will issue a federal plan for tribes that do not 

submit a plan or fail to submit a satisfactory plan.

Commenters added that to effectively participate in a carbon trading program, however, the 

Navajo Nation government will need emission credits or allowances corresponding to its 

emission goal in order to trade emission credits, which would be established in a 111(d) plan, 

and for these reasons, the Navajo Nation believes it would be both appropriate and necessary for 

EPA to develop a 111(d) plan for the Navajo Nation (The Navajo Nation believes it may sell or 

trade carbon credits from regenerating resources, demand-side energy efficiency measures and 

other new low- and non-emitting electricity generation" without a 111(d) plan. See 79 FR at 

65496.) (The Navajo Nation also believes that a federal 111(d) plan could be developed on a 

multi-jurisdictional basis in conjunction with nearby (or potentially other) states developing 

111(d) state plans, if such a thing was appropriate. See 79 FR 65495.)

Commenters stated EPA must commit in the final rule to doing so for any area of Indian country 

containing designated facilities which elects not to submit a plan. Commenters stated EPA 

proposed CO2 new source performance rules for subpart Da and KKKK sources in January 

2014, thereby triggering CO2 standards of performance for existing subpart Da and KKKK 

sources.[42 U.S.C. section 7411(d)(1). "each State shall submit a plan which establishes 

standards of performance for any existing source" (emphasis added)] A plan (whether state,

tribal-as-state, or Federal) establishing CO2 standards of performance for existing subpart Da 

and KKKK sources (designated facilities) - wherever they are located - is therefore not 

discretionary.[Id.] EPA is not authorized to exempt designated facilities on tribal lands from the 

requirement to reduce their CO2 emissions. [42 U.S.C. section 7601(d)(4); 40 C.F.R. section 

49.11(a); 63 Fed. Reg. at 7,258.]
12

Response 11: The EPA disagrees with the commenters’ interpretation of 40 CFR §49.11. A 

necessary first step to EPA having an obligation to promulgate a federal implementation plan is a 

finding by the Agency that such a plan is “necessary or appropriate” to protect air quality. Only 

after making such a finding is EPA required to promulgate a plan “without unreasonable delay”. 

See. 40 CFR §49.11(a). The United States District Court of the Northern District of California 

specifically endorsed this interpretation in dismissing an unreasonable delay claim regarding the 

establishment of Regional Haze requirements for the Navajo Generating Station. See, In the 

final rule, the EPA is establishing emission performance rates for each of the four EGU located 

in Indian country and mass- and rate-based performance goals for each of the three affected areas 

of Indian country. It is not establishing emission goals for the Navajo Nation or the other two 

tribes with EGU located in their areas of Indian country. For a discussion of the potential for 

entities other than the owner/operator of EGU to generate ERC, see section VIII.K of the 

preamble to the final rule. Multi-state plans are also addressed in section VIII. 

Comment 12: Commenters stated in the proposed TAR, EPA explained that it did not propose to 

treat tribes in the same manner as states for purposes of implementation plan submittal deadlines 

under section 110(a)(1) of the Act (i.e. three years after the promulgation of a NAAQS, or such 

shorter period established by EPA) because tribes are not required to seek approval for the 

implementation of air programs. Commenters remarked that the supplemental proposal does not 

set deadlines for submission of tribal implementation plans, and Section 49.4 of the regulations 

does not include section 111 or the state plan submission deadlines under section 111(d)'s 

Implementing Regulations (40 C.F.R. section 60.23), nor does the TAR discuss these provisions. 

Commenters believed EPA's reasoning for excluding state plan submission deadlines under the 

NAAQS program, as explained in the proposed TAR twenty years ago, should not apply to this 

proposal, and EPA should establish plan submission and implementation deadlines that are 

consistent with those set forth under the Clean Power Plan. Commenters added that expediting 

the TAS approval process should help to meet these deadlines, explaining that the TAR 

authorizes tribes to rely on prior TAS approvals as part of a new application for approval to 

implement a Clean Air Act program: "[w]here the applicant has previously received 

authorization for a Clean Air Act program or for any other EPA-administered program, the 

applicant need only identify the prior authorization and provide the required information which 

has not been submitted in the previous application." 40 C.F.R. 49.7(a)(8). Commenters stated

that the Navajo Nation received TAS approval to implement a Part 71 permit on Four Corners 

and Navajo Generating Station in 2006 (Jill E. Grant, Implementation of Clean Air Act Programs 

by American Indian Tribes, in Julie Domike and Alec Zacaroli (eds.), The Clean Air Act 

Handbook, ABA, 2011, at 684, fn. 87.), and this approval may help to expedite the process to 

submit an implementation plan, if the Nation decides to do so.

Response 12: Unless and until they seek and obtain TAS for that purpose, tribes with EGU 

located in their areas of Indian country are not required to submit proposed plans implementing 

the final Emission Guidelines. Since tribes are not required to submit proposed plans, they 

cannot be subject to the timeframes for states to submit proposed plans specified in subpart B of 

40 CFR part 60 as those timeframes are based on states being required to submit proposed state 

plans implementing the Emission Guidelines. Even in circumstances where a tribe sought and 

EPA approved TAS for purposes of developing a TIP implementing the Emission Guidelines, 
13

consistent with 40 CFR §49.4, EPA does not believe that it would be appropriate to hold a tribe 

to those timeframes. Unless and until a tribe submits an application for approval of TAS for the 

purpose of developing and proposing to EPA for approval a tribal implementation plan (TIP) 

implementing the Emission Guidelines, any statement regarding whether EPA would include a 

deadline for submitting the TIP itself in granting TAS for that purpose would be purely 

speculative. 40 CFR §49.7(a)(8) speaks for itself and, thus, no response in that regard is needed.

Comment 13: Commenters stated that significant time will be required to site, plan, design, 

permit, and construct the new infrastructure required to meet the interim and final goals of a 

111(d) program, noting that in Arizona, more than 80% of the land is owned by federal and state 

governments and tribal nations, and siting and permitting of electricity and gas transmission 

infrastructure on federal or tribal land is subject to many processes and procedural requirements 

for compliance that can threaten timely completion of these projects. Commenters explained that 

there are several factors that complicate a utility's ability to construct the new energy 

infrastructure needed to meet the requirements associated with the Proposed Rule. Commenters 

stated one of the biggest issues is the lengthy timelines associated with obtaining necessary 

environmental approvals to construct and operate these facilities. (verbatim) Commenters stated 

the Western U.S. is unique in the amount of land owned by the federal government, state 

governments, and tribal nations. SRP is particularly concerned that the high proportion of 

federal, state, and tribal lands in Arizona - more than 80% - represents unique challenges to 

timely completion of new energy-related projects. Commenters added that specifically, in 

Arizona, approximately 41% of land is owned by the federal government, almost 13% is 

controlled by the state, and about 27% belongs to tribal nations. In addition, commenters stated, 

7,220 square miles within the state have been identified as critical habitat for threatened or 

endangered species listed under the Endangered Species Act. Commenters provided Figure 7-7

that shows the extensive amounts of federal and tribal lands within Arizona, including critical 

habitat designations. Commenters stated siting and permitting of new energy infrastructure on 

federal land can take 10 years or more. In many cases, commenters stated, obtaining the permits 

necessary to construct a transmission line can take longer than constructing the line itself. 

Response 13: This comment is outside of the scope of this rulemaking.

Comment 14: Commenters stated the Ute Tribe supports the EPA's Proposed Rule but the 

proposed interim and final carbon dioxide emission performance goal for the Bonanza Power 

Plant could be improved. Commenters stated the Proposed Rule should ensure that Deseret 

Power reduce emissions through controls and technological efficiencies rather than substituting 

energy from cleaner sources which would be an environmental injustice. Commenters continued, 

stating that the Tribe strongly objects to Bonanza Power Plant's inclusion in a multi-jurisdictional 

plan or in a cap-and-trade program, and allowing Deseret Power to participate in a multijurisdictional plan or cap-and-trade program would enable Deseret Power to achieve the bulk of 

its required emission reductions through payment rather than efficiency improvements. 

Commenters believed this defeats the purpose of the Proposed Rule because under such 

programs, the Bonanza Power Plant could continue to emit at its current level to the detriment of 

the Tribe, and Deseret Power should be accountable for its indiscriminate carbon emissions. 
14

Commenters added that these emissions are exacerbating the current impacts of climate change 

on the Reservation, which will only increase in average temperature, increase droughts and 

erosion on the Reservation, and dry up the Tribe's reservoirs. Commenters closed, stating that 

requiring strict standards does not make up for past violations of the Clean Air Act but there is 

more than enough time for Deseret Power to reduce carbon emissions by more than 6%, and 

through this Proposed Rule, EPA has the opportunity to enforce a final rule that will help the 

general welfare of the Ute Indian Tribe.

Response 14: In the final rule, EPA establishes emission performance rates for the four EGU 

located in Indian country, including the Bonanza Power Plant, and mass- and rate- based 

performance goals for each of the three affected areas of Indian country, including the UintahOuray Reservation, using the same methodology it used in establishing rates and goals relating to 

EGU located outside of Indian country. While the EPA understands that the final rule, as 

implemented through an EPA-approved tribal implementation plan or a promulgated federal 

implementation plan may impact tribes differently from the way it impacts states, EPA believes 

that it is important to establish rates and goals for EGU located in Indian country and to apply the 

same methodology regardless of the location of a particular EGU unless specific circumstances 

dictate otherwise. Unless the Ute Tribe seeks and obtains TAS status for the purpose of 

developing a tribal implementation plan implementing the Emission Guidelines and EPA 

subsequently approves such a plan, the application of the final Emission Guidelines to the 

Bonanza Power Plant would be achieved through a federal implementation plan should EPA 

determine that such a plan is “necessary or appropriate”. Any such federal implementation plan 

would generally track the final Emission Guidelines, possibly including some type of trading 

program. Unless and until the EPA determines that it is “necessary or appropriate” to establish a 

federal plan implementing the final Emission Guidelines on the Uintah and Ouray Reservation 

and promulgates such a plan it is not possible to know exactly how the final Emission Guidelines 

may ultimately affect the Bonanza Power Plant. The question of any alleged past violations of 

the Clean Air Act is outside the scope of the final rule. Please see section XII.F of the preamble 

to the final rule for a discussion of the potential interaction between the final rule and tribes and 

EPA’s efforts to inform tribes of and obtain their input concerning those interactions.

Comment 15: Commenters stated EPA should immediately clarify that states can take credit for 

RE generation projects located on tribal lands to meet the states' emission reduction goals. (As 

recognized in Executive Order 13175, "the United States has a unique legal relationship with 

Indian tribal governments as set forth in the Constitution of the United States, treaties, statutes, 

Executive Orders, and court decisions." E.O. 13175, 65 Fed. Reg. at 67249. Accordingly, every 

federal agency "shall have an accountable process to ensure meaningful and timely input by 

tribal officials in the development of regulatory policies that have tribal implications." Id. at 

67250. As EPA also recognizes, EPA shares "the federal government's trust responsibility, which 

derives from the historical relationship between the federal government and Indian tribes..." EPA 

Policy on Consultation and Coordination with Indian Tribes (May 4, 2011). EPA's own Indian

Policy states that EPA will "give special consideration to Tribal interests in making Agency 

policy, and [to] insure the close involvement of Tribal Governments in making decisions and 

managing environmental programs affecting reservation Iands," 1984 Indian Policy at I, and 
15

"will assure that tribal concerns and interests are considered whenever EPA's actions and/or 

decisions may affect reservation environments," Id. at 3.)

Commenters stated EPA should issue an immediate clarification that EPA has no interest in 

modifying the current renewable energy development marketplace and supports without 

conditions or questions multi-jurisdictional development of renewable energy resources and that 

such development can be contracted for use to meet compliance requirements for any state under 

the Proposed Rule for the States. Commenters stated the current renewable energy marketplace 

(which allows for such multi-jurisdictional development) should be left undisturbed.

Commenters supported EPA including in its guideline a system that will allow the power plants 

that serve such areas to take advantage of the energy efficiency and renewable energy 

opportunities available in states without affected power plants and recommend that EPA use the 

regional alternative approach as described in the October 30, 2014 NODA. Commenters also 

recommended that EPA include the potential renewable energy from such areas in its 

determination of the regional potential for renewable energy, which would provide for that 

potential to be included in the targets of states in the region.

Commenters stated that if EPA does not permit tribes and states to take credit for emission 

reductions outside of their boundaries, EPA would be restricting the free exchange of this new 

commodity. Commenters stated there is also the potential that EPA could be "taking" the value 

of the credits from tribes and states, in violation of the Fifth Amendment of the U.S. 

Constitution.

Response 15: See section VIII. K of the preamble to the final rule for a discussion of the ability 

of entities other than the owners/operators of EGU to generate ERC under a rate-based state plan.

Comment 16: Commenters stated they do not believe as a matter of policy that RE generating 

resources must be located in a state to offset CO2 emissions for that state's 111(d) plan. Also, 

commenters remarked that commerce across state lines is decidedly a federal responsibility, and 

accordingly, EPA must take care to ensure that its Proposed Rule will not unduly burden 

interstate energy transactions and commerce. However, commenters stated, such an outcome 

would result if EPA does not permit Tribes and states to take credit for emission reductions from 

RE generating resources located outside their boundaries.

Response 16: As further explained in Sec. VIII of the preamble, eligible measures that could be 

used to adjust a CO2 emission rate under a rate-based state plan which are located in a state with 

a mass-based plan are restricted from being counted under another state’s rate-based plan. An 

exception is made for RE measures that occur in such mass-based states, because of its unique 

role in BSER. RE measures must meet additional eligibility criteria, further explained in Sec. 

VIII, in order to be used to adjust the CO2 emission rate of an affected EGU in a state with a 

rate-based plan. This exception only applies to RE, other non-BSER emission reduction 

measures located in mass-based states, including demand-side EE, are restricted from ERC 

issuance in rate-based states.
16

Comment 17: Commenters stated EPA should require that any state or states that seek to include 

energy efficiency gains (in the context of multi-jurisdictional plans) should include the potential 

savings in their targets. Commenters added that EPA could also determine that a target 

adjustment might not be necessary if the potential change in the targets is small enough, as it 

might be from areas with low energy consumption.

Response 17: See section VIII. of the preamble to the final rule for a full discussion of the how 

states might structure their state plans to account for energy efficiency gains..

Comment 18: Commenters stated EPA addresses areas without affected EGUs, including 

Vermont and the District of Columbia, and those areas without affected EGUs have expressed 

interest in participating in multi-jurisdictional (or state) plans. Commenters stated these areas 

also may consume energy produced elsewhere and could contribute to meeting a 

multijurisdictional (or state) CO2 goal with its RE or EE capabilities. Commenters added that 

EPA requested methodologies for including the RE and EE potential from these areas in 

crediting goals in other areas. [79 FR 65496] Commenters stated it is inappropriate for U.S. EPA 

to propose a rule that clearly does not identify that portions of the proposal will also impact 

states covered under the June 18, 2014 proposal. Commenters believed any proposal that 

requests comments on alternatives for any state subject to the June 18, 2014 proposal should 

have been clearly identified as such. 

Response 18: As explained in its November 4, 2014 Supplemental Proposed Rulemaking (79 FR 

65481), the EPA based its supplemental proposal on the analytical approach of the June 18, 2014, 

proposal, and this preamble adopted and relied on all of the information in that proposal, including 

the background information, explanations, analyses, alternatives, solicitations of comment, etc. EPA 

also solivited comment on whether jurisdictions—including any states, territories and areas of Indian 

country—without existing fossil fuel-fired EGUs subject to this rule can partner with jurisdictions 

that are subject to the June 14, 2014 proposal. Therefpre, the EPA clearly identified its solicitation of 

comment regarding whether areas without affected EGUs may partner with states with affected 

EGUs under the June 14, 2018 proposal.

Comment 19: Commenters stated that EPA proposed a supplemental rule to address existing 

EGUs on tribal nation lands and U.S. territories ("the supplemental proposal"), which were not 

covered under the CPP proper. Commenters believed covering these EGUs is essential, since 

they emit significant quantities of CO2 and must not be granted a loophole to avoid regulation. 

Commenters argued that the supplemental proposal must be strengthened, however, because it 

does not require CO2 emissions reductions from these EGUs that are achievable through 

application of the best system of emission reduction.

Response 19: In the final rule, EPA establishes emission performance rates for the four EGU 

located in Indian country and mass- and rate- based performance goals for each of the three 

affected areas of Indian country using the same methodology (the application of BSER) it used 

in establishing rates and goals relating to EGU located outside of Indian country. Please see 

sections VI. and VII. for a detailed discussion of how EPA derived the emission performance 

rates and the mass- and rate-based performance goals, respectively.
17

Comment 20: Commenters have concerns with EPA's overall framework for establishing the 

"best system of emission reductions" (see UNS Comments); however, commenters believed that 

EPA should be consistent in its application of the framework as it applies to states, U.S. 

territories and areas of Indian country.

Response 20: In the final rule, EPA establishes emission performance rates for the four EGU 

located in Indian country and mass- and rate- based performance goals for each of the three 

affected areas of Indian country using the same methodology (the application of BSER) it used 

in establishing rates and goals relating to EGU located outside of Indian country. Please see 

sections VI. and VII. of the preamble to the final rule for a detailed discussion of how EPA 

derived the emission performance rates and the mass- and rate-based performance goals, 

respectively.

Comment 21: Commenters stated that tribes should not be required to participate in 111(d) 

plans, including multi-jurisdictional plans, for RE generating facilities located on tribal lands to 

count toward a state carbon emission reduction goal. In the event that EPA does not provide an 

immediate clarification, Commenters believed EPA should still explain in the Final Rule that 

states and tribes do not have to enter into multi-jurisdictional plans in order for states to take 

credit for RE projects and RE developed on tribal lands to meet that state's CO2 emission 

reductions. Commenters said EPA must clarify in the Final Rule, if not sooner, that there are no 

such prerequisites as it relates to RE development, and EPA should not be forcing states and 

tribes to enter into potentially costly and unnecessary multi-jurisdictional plans to obtain the 

level of coordination that they have long enjoyed prior to EPA's Proposed Rule.(A major 

obstacle of the developing a multi-jurisdictional plan is time. Further delays in allowing tribal 

lands to be used to develop renewable energy is at a minimum harmful, but could also be 

considered arbitrary and discriminatory.) Another important concern for tribes raised by the 

commenters relate to the additional obligations imposed under the Tribal Authority Rule. That is, 

commenters stated, Tribes must first seek treatment as a state before they may even submit a 

111(d) plan, in addition to negotiating with nearby states to participate in a multi-jurisdictional 

plan. In the absence of a tribal 111(d) plan, EPA may, but will not necessarily, issue a federal 

plan covering that area of Indian Country. Commenters stated either one of these options creates 

uncertainty and delay, hereby hindering transactions between Tribes, states, EGUs, and/or 

utilities to promote renewable energy generation and the use of the energy and/or the RECs to 

address a state's CO2 emission reductions plan. Therefore, commenters concluded, there should 

be no requirement that a tribe must have a 111(d) plan for emission reductions from renewable 

energy generating facilities located on tribal lands to count toward a state's carbon reduction 

goal.

Commenters stated nothing in the Clean Air Act expressly authorizes any Tribe, or the EPA 

acting under its delegated authority on behalf of the Tribe, to regulate or enter into multijurisdictional arrangements that would regulate activity beyond the boundary of its own 

Reservation. Commenters believed that the authority of the Tribe to regulate matters external to 

its own Tribal affairs within its own lands does not extend to multi-jurisdictional arrangements 

with states or other authorities (the jurisdictional reach and authority of which do not match that 
18

of the Tribe) to regulate either the air emissions from the Bonanza Unit 1 nor the activities 

"beyond the fence" involving non-tribal member businesses. Commenters cited the Supreme 

Court has described the extremely limited nature of a Tribe's reach with respect to engaging in 

regulatory matters outside its own boundary: "The ownership status of the land . . . is only one 

factor to consider in determining whether regulation of the activities of nonmembers is 

'necessary to protect tribal self-government or to control internal relations.' It may sometimes be 

a dispositive factor. Hitherto, the absence of tribal ownership has been virtually conclusive of the 

absence of tribal jurisdiction; with one minor exception we have never upheld under Montana the 

extension of tribal civil authority over nonmembers on non-Indian land."[Nevada v Hicks, 533 

U.S. 353 (2001)] Commenters stated there is no jurisdictional alchemy by which the limited 

authority granted under the Clean Air Act to allow the Tribe to regulate specified air emissions 

from sources located within its own reservation boundaries to be extended and expanded through 

arrangements with states (whose authority is more plenary in this regard). Commenters asserted

that the power to regulate emissions from the Bonanza Unit 1 cannot be delegated in whole or in 

any part to other authorities under the Act. Commenters stated the EPA lacks authority under its 

delegated Indian Country jurisdiction, for example, to promulgate a plan that would effectively 

mandate Bonanza Unit 1 to comply with regulatory regimes created by other authorities, states, 

or regional groups.

Commenters stated that the authority of the Tribe to regulate matters external to its own Tribal 

affairs within its own lands does not extend to multi-jurisdictional arrangements with states or 

other authorities (the jurisdictional reach and authority of which do not match that of the Tribe) 

to regulate either the activities of [commenters] in serving communities beyond the boundaries 

of the Reservation, nor the activities and control measure "beyond the fence" involving nontribal member businesses. Commenters opposed any attempt to expand the jurisdiction of EPA or 

the Tribe under the CAA to engage in regulatory processes in concert with state authorities, 

thereby rendering Bonanza Unit 1 subject to authority of region-wide, multiple jurisdictions on 

both a state and federal level, and explains that this is neither expressly authorized under the 

Clean Air Act, nor is it inherent within the Tribe's power. Commenters stated that the dictates of 

Montana v. USA clearly prohibit an inference of broad police, regulatory, and other 

governmental power over the activities of non-tribal members such as Deseret and other nontribe members doing business on fee and other private lands within the boundaries of the longdisputed Reservation. Commenters stated that just as EPA has no Clean Air Act authority to 

mandate renewable energy development or operational regulations on non-tribal activities 

outside of tribal lands on the Reservation, EPA does not have Clean Air Act authority to mandate 

energy efficiency programs on the reservation. Moreover, commenters stated that in an area of 

the country where people lack basic services, it would seem that the last thing a federal agency 

should be doing is to limit people's access to badly needed electricity.

Commenters stated EPA has made no finding, and there is no support to conclude that emissions 

of carbon dioxide from Bonanza Unit 1 must be regulated in order to protect air resources strictly 

within the boundaries of the Reservation. Commenters stated regulations aimed at curbing global 

climate change effects beyond the Reservation cannot give rise to participation in multijurisdictional arrangements similar to treatment afforded to states under Section 111(d), and 

neither EPA nor the Tribe is authorized to engage in such functions beyond the Reservation 

boundaries.
19

Response 21: See section VIII. K of the preamble to the final rule for a discussion of the ability 

of entities other than the owners/operators of EGU to generate ERC under a rate-based state plan 

and section VIII.L for a discussion of various approaches to multi-jurisdictional plans. 

Otherwise, the comments are outside the scope of the final rule which establishes emission 

performance rates for the four EGU located in Indian country and mass- and rate- based 

performance goals for each of the three affected areas of Indian country using the same 

methodology (the application of BSER) it used in establishing rates and goals relating to EGU 

located outside of Indian country and the framework for subsequent state, tribal and federal plans 

implementing the requirements and does not address implementation itself. EPA notes, 

however, that no entity participating in a multi-jurisdictional plan will be exercising regulatory 

authority beyond its own borders. The EPA also notes that CAA section 301(d) constitutes a 

Congressional delegation of authority to Indian tribes to exercise Clean Air Act authority within 

the exterior boundaries of the tribe’s reservation regardless of the ownership status of any 

particular parcel of land.

Comment 22: Commenters believed it is important to assure that these efforts are of value in 

EPA's carbon pollution guidelines, and they therefore support EPA recognition that tribes, 

whether or not they have affected EGUs, should be able to participate in multi-jurisdictional 

programs along with, and to the same extent as, states. Commenters stated that Renewable 

energy, energy efficiency, and other emission reduction programs available under EPA's 

proposal, whether located on or off tribal lands, should be available to assist both tribes and 

states in achieving compliance as part of a state's or tribe's compliance plan or as part of a multijurisdictional program in which states or tribes or both participate.

Commenters stated that in the past, regional planning organizations and other similar such 

partnerships have been a useful engagement mechanism for Tribes. Commenters supported the 

option of multijurisdictional or independent plans for Tribes with facilities impacted by the rule. 

Regarding EPA's solicitation for comment on "whether areas without affected EGUs may 

participate in multi-jurisdictional plans", Commenters supported engagement of all Tribal 

partners in the development of CO2 implementation plans and view this as a possible 

opportunity for Tribes to co-create RE infrastructure and stimulate local job growth.

Commenters supported EPA including in its guideline a system that will allow the power plants 

that serve such areas to take advantage of the energy efficiency and renewable energy 

opportunities available in states without affected power plants but it is also important that the 

targets reflect the potential compliance mechanisms that EPA determines to be available at 

reasonable cost.

Commenters stated EPA's reliance on the TAR in issuing its Proposal is arbitrary and capricious 

because the TAR only applies to tribes that may have, or acquire, the right to regulate stationary 

sources located on tribal lands. Commenters noted that since the Navajo Nation is legally 

incapable of regulating carbon emissions from the FCPP and NGS, EPA should rely on a 

regional market-based multi-approach described below for reducing GHG emissions from these 

sources.
20

Commenters also noted that the Navajo Nation is not an owner of the FCPP or NGS, and the 

energy generated by the FCPP and NGS are not used on the Navajo Nation. Instead, the owners 

of FCPP and NGS transmit this electricity to its customers in Arizona, New Mexico, Nevada, 

and elsewhere. Commenters observed that it is evident that the FCPP and NGS are owned by a 

combination of regional power companies that sell the power to its customer based in multiple 

states, and accordingly, EPA should use a multijurisdictional regional approach to reducing 

carbon emissions from these plants. Commenters believed EPA should pursue a 

multijurisdictional regional approach that either requires prompt retirements of these remaining 

units or requires a greatly reduced dispatch from these units in order to achieve the carbon 

reductions necessary to address climate change.

Response 22: See section VIII. K of the preamble to the final rule for a discussion of the ability 

of entities other than the owners/operators of EGU to generate ERC under a rate-based state plan 

and section VIII.L for a discussion of various approaches to multi-jurisdictional plans. In the 

final rule, EPA establishes emission performance rates for the four EGU located in Indian 

country and mass- and rate- based performance goals for each of the three affected areas of 

Indian country using the same methodology (the application of BSER) it used in establishing 

rates and goals relating to EGU located outside of Indian country. The question of whether the 

Navajo Nation has the legal authority to establish a tribal implementation plan (TIP) regulating 

the activities of the FCPP and NGS is outside the scope of the final rule as it goes to 

implementation of the provisions of the final Emission Guidelines. The EPA will address this 

issue if and when the Navajo Nation submits a request for approval of TAS for the purpose of 

developing and implementing such a plan.

Comment 23: Commenters stated that the proposal encourages states to work together to 

achieve their respective CO2 emissions reductions, and while the commenters support this idea, 

it seems that states are reluctant to enter into agreements of this type without more information 

and guidance from the EPA. Commenters encouraged the EPA to provide this assistance to 

states, and to any interested tribes, to facilitate this goal. Commenters believed that, overall, 

tribes have been left out of this process; tribes need to be included from the beginning stages of 

any multi-state plans for energy cost and security, as well as environmental, reasons. 

Commenters suggested that one way of doing this would be to enlist the aid of the existing 

Regional Planning Organizations (RPO's). Commenters remarked that the RPO's were very 

valuable in allowing states and tribes the opportunity to work together on Regional Haze 

concerns a number of years ago, and tribal inclusion is especially important given the amount of 

renewable energy that is currently produced in Indian County, which will only increase over the 

coming years.

Response 23: See section VIII.L of the preamble to the final rule for a discussion of various 

approaches to multi-jurisdictional plans.

Comment 24: Commenters stated that EPA's "regional approach" to BSER and state target 

setting is preferred, for all state, tribal, and territorial emissions rate target development. 

Commenters stated (verbatim) EPA sought comment in the Notice of Data Availability 
21

("NODA"), on a regional approach to assessing the potential for CO2 emissions reduction under 

BSER building blocks 2, 3, and 4. Specifically, commenters stated EPA proposed that each 

state's renewable energy target be adjusted to reflect the potential for renewable energy across 

the multi-state region in which the state is located. Commenters stated the supplemental proposal 

reflects this approach, for building block 3, with respect to one option for CO2 emissions target 

setting for Indian country and territories. Commenters stated it is CATF's position that this 

approach is relevant for assessing the degree to which CO2 emissions reductions due to reduced 

utilization of designated facilities can be achieved due to any of the non-unit-specific measures 

included in EPA's BSER. Commenters stated because power plant CO2 does not produce 

adverse localized public health impacts, and because designated facilities under this rule are part 

of an interconnected electricity grid, the opportunity to enable reduced utilization of a designated 

facility can come from any region or area that is connected to the area containing the designated 

facility. Commenters stated any of those resources should be evaluated in determining a state's 

emission rate target. Additionally, commenters stated if a mass-based implementation system 

involving the exchange of allowances is used, see infra Section IV, jurisdictions (for example 

territories) that are not grid connected can potentially generate allowances. But for that to occur, 

commenters stated, some mechanism for assessing the potential for emissions reductions and 

some way for formalizing that potential must also occur. For the CO2 reduction potential due to 

building block 2 redispatch, commenters stated, a regional BSER assessment makes the most 

sense, as they pointed out in their December 2, 2014 comments. Commenters added that for 

building blocks 3 and 4 this is equally true, as a regional approach reflects the interconnected 

nature of the grid, the designated facility's role in that grid, and allows accurate projection 

(avoiding double counting) of the CO2 reduction potential from renewable energy and other 

building block 3 and 4 resources. Commenters stated a regional approach also allows 

consideration of energy system reliability issues. Commenters stated, therefore the BSER 

analysis, and development of BSER based target CO2 emissions goals for all states, tribal areas 

and territories can and should be done on a regional basis. For example, commenters stated, 

while Indian country jurisdictions did not report having either natural gas or renewable energy 

generation, there is a great deal of potential in the regions in which Indian country is located. 

Commenters stated the issues raised in the supplemental proposal with respect to Indian country 

therefore further underline the importance of a regional approach to calculating building blocks 2 

and 3. At present, however, commenters stated, the CO2 emissions targets for Indian country 

with designated facilities do not reflect any redispatch because there are no natural gas combined 

cycle ("NGCC") units within these areas. Commenters stated that in part that is a baseline 

problem - while EPA proposes to apply the West region's 6 percent annual average renewable 

energy growth factor to Indian country, it proposes to apply that growth factor to Indian 

country's baseline renewable generation of zero, resulting in a building block 3 goal of zero. 

Alternatively, commenters stated, EPA is proposing to use a baseline of 0.37 percent consistent 

with the lowest baseline in the states. Commenters said that is not enough - to truly reflect a 

regional approach, the Agency should use as a baseline the regional baseline. Commenters stated 

that would better yield tribal CO2 emissions targets reflecting the best system of emission 

reduction. Commenters stated CATF agrees that a regionalized approach to redispatch and 

renewable energy potential better reflects the interconnected nature of the grid and the 

opportunities available to states to reduce CO2 emissions from designated facilities. Commenters 

stated a regionalized approach to redispatch would address the concern that states, tribes, and 

territorial areas with coal-fired designated facilities and limited available natural gas capacity 
22

have less stringent state goals than would be the case if the actual regional interconnected nature 

of the electricity system were reflected in the goal setting process. (27 SNPRM, 79 Fed. Reg. at 

64,551. See generally Lucy McKenzie et al., Strengthening the Clean Power Plan: Three Key 

Opportunities for the EPA, 27 ELEC. J. 1, 10-11 (Dec. 2014) (describing the advantages of 

regional implementation plans.) Commenters closed, stating this approach also allows the BSER 

to reflect the lower compliance costs and abatement measures available when the analysis is 

done on a regional basis.

Commenters supported allowing the participation of multi-jurisdictional, including areas without 

affected EGUs, as these areas will be able to contribute to CO2 emissions reductions through 

Building Block 3 and Building Block 4 programs. Commenters believed that the expansion of 

participation coverage to multi-state areas has the potential to increase overall program 

efficiency; however, any such system must be designed to ensure the absence of double 

counting, and to be able to verify that purchased RECs do ultimately displace fossil fuel-fired 

emissions in the United States. Commenters noted that if participation is expanded across 

national borders such that the EPA allows use of RECs generated outside of the United States for 

compliance, Commenters recommended that the EPA require any such agreements be tied to 

delivery of the associated electricity into the United States for displacement of domestic fossil 

fuel-fired generation.

Commenters stated that Tribal and federal lands across the western states will impact state 

strategies to comply with the Proposal.

Commenters stated EPA requests comment on whether areas without designated facilities, such 

as Vermont, the District of Columbia, certain U.S. territories and most areas of Indian country, 

may participate in multi-jurisdictional plans, noting that including these jurisdictions may expand 

the renewable energy and energy efficiency measures available to displace generation from 

designated facilities. [SNPRM, 79 Fed. Reg. at 65,496.] Commenters agreed that any clean 

energy measures within any jurisdiction (whether with or without designated facilities), should 

be eligible to contribute to CO2 emissions reductions at designated facilities elsewhere. 

Commenters stated that this point is highlighted by the regional approach to the BSER offered by 

EPA. Commenters added these states, territories, and tribal lands can and should be part of the 

CO2 solution at designated facilities located elsewhere. Commenters stated the integrated nature 

of the electricity grid, in which these jurisdictions do participate means that actions taken there 

do enable reduced utilization of designated facilities elsewhere on the grid. Commenters stated 

the question that remains is how CO2 emissions avoided through low- or zero-carbon energy 

generation and energy efficiency measures in these jurisdictions could be used to adjust or credit 

CO2 emission rates in states covered by the CPP. [SNPRM, 79 Fed. Reg. at 65,496.] 

Commenters' position is that states, and tribal or territorial areas without designated facilities 

must make a submittal to certify that there are no designated facilities within the pertinent areas, 

and where relevant, must make clear the intention with respect to the future of any already 

retired designated facilities. Commenters stated to the extent that EPA finalizes a regional 

approach to BSER based on the potential for building block 3 and 4 resources in these 

jurisdictions to reduce CO2 emissions from designated facilities, the jurisdictions must submit 

plans or statements certifying or confirming the resources available or projected to reduce 

utilization of designated facilities in other states. And, commenters closed, should a state, tribe, 

or territorial area seek allowances under any mass-based allowance trading compliance system, 
23

there must be some basis for tracking the renewable or their low- or zero-carbon resources within 

their boundaries, which can be provided by such plan or certification.

Commenters recommend that EPA's final rule provide states and tribes with the flexibility 

necessary to work cooperatively to develop effective strategies for compliance. Commenters 

continued, stating, in addition to allowing for the blending of individual state and tribal goals 

into a region, EPA should also consider allowing strategies that allow for cooperation on specific 

elements without requiring the combination of goals. Commenters said this flexibility will allow 

for states and tribes to work more collaboratively without mandating the complexities of a full 

regional plan.

Response 24: In the final rule the EPA has finalized a number additional options fostering state 

cooperation without requiring a single multi-state plan or joint goal. Sec. VIII of the preamble 

discusses the obligations of states that do not have affected EGUs. Sec. VIII also discusses how 

affected EGUs may use, and under what coditions, use ERCs and allowances from other states.

Comment 25: Commenters stated Clean Air Act section 111(d) requires EPA to "establish a 

procedure similar to that provided by section 7410 [and emissions guidelines][See 40 Fed. Reg. 

53,340, 53,342 (Nov. 17, 1975). Commenters stated EPA properly interprets its CAA section 

111(d) duty to approve timely and satisfactory plans as requiring promulgation of substantive 

criteria including emissions guidelines reflecting an appropriate best system of emission 

reduction. Commenters stated EPA is not re-opening its interpretation of "satisfactory" in 42 

U.S.C section 7411(d)(2)(A) in this proposal, 79 Fed. Reg. at 34,852, nor should it. Moreover, 

commenters added, CAA section 116 specifically prohibits states from adopting or enforcing 

emission standards under section 111 that are "less stringent than the standard or limitation." [42 

U.S.C. section 7416.]

Response 25: The EPA appreciates commenters’ support of its interpretation of its responsibility 

under CAA §111(d). The language in CAA §116 is self-explanatory. 

Comment 26: Commenters stated that in October 2014, multiple parties filed challenges to the 

EPA BART rule in the Ninth Circuit Court of Appeals, and while the commenters, which has 

intervened in these actions, support the United States in defending the rule, they also believe it 

would be prudent to allow adequate flexibility in the final rule to address the possibility that the 

Court overturns EPA's BART Rule. Commenters explained that by meeting its emissions goals 

at NGS through compliance with EPA's BART Rule, EPA expects that tribes will not incur any 

additional costs under the Tribal EGU Rule. Commenters believed this is a key reason for their 

support, as they strongly oppose any goal or requirement for Navajo Territory that could increase 

the cost of NGS energy and, by extension, CAP water delivery. Commenters continued, stating 

that in 2004, they relinquished their long-held Federal Indian reserved water rights in reliance 

upon the continued availability and delivery of CAP water, which would be made affordable 

through the use of NGS electricity, and revenue from the sale of excess NGS power funds the 

Lower Colorado River Basin Development Fund (LCRBDF), which subsidizes the fixed 

operation, maintenance, and replacement charges associated with the delivery of CAP water for 
24

Arizona Indian tribes. Commenters explained that after incurring the costs associated with the 

BART Rule commitments, any further EPA-mandated action at NGS could increase NGS's 

capital and operation and maintenance costs to the point of either closing the power plant or at 

least substantially increasing power costs, and in addition, the LCRBDF funds to subsidize the 

costs of delivering CAP water to the Community and to construct the facilities necessary to 

allow the Community to fully utilize the water allocated to it in its water rights settlement would 

be diminished. Commenters believed that a significant rise in water costs, or worse, the 

shutdown of NGS, would make it extremely difficult, if not impossible, for the them to pay for 

CAP water, a primary use of which is for Community agriculture. Commenters stated farming 

the Community's land is of great importance for cultural, economic, and health reasons. 

Commenters stated in reliance on the availability of affordable and dependable CAP water, the 

Community is projecting to bring 146,330 acres of the Community's land back into agricultural 

production. Currently, 40,000 acres are being cultivated. Commenters explained that to deliver 

water throughout the Community, the Community is developing an expansive 2,400-mile 

irrigation canal system under the Pima-Maricopa Irrigation Project (P-MIP), in reliance upon the 

delivery of affordable CAP water that was a central aspect of the Community's bargain in settling 

its water claims. Commenters believed that compliance with the Tribal EGU Rule at NGS, unlike 

at the other power plants in Indian Country, affects not only the tribe where the plant is located, 

but many other tribes such as they who rely on NGS for delivery of federally-guaranteed water, a 

trust resource under the Arizona Water Settlement Act (AWSA). For this reason, commenters 

requested EPA must consider its trust obligations to, and consult with, them as this rulemaking 

proceeds. As trustee of the commenters' water rights, they contended that EPA cannot impose 

obligations at NGS that limit, suppress or otherwise undermine the their right to receive and use 

its CAP water allocation guaranteed by the AWSA.[While the Community appreciates that the 

Tribal EGU Rule is not expected to impose additional costs at NGS, EPA must recognize that the 

BART Rule has, and will continue to have, significant cost implications for the Community. The 

Community supported the BART Rule because it was the best and only viable BART alternative 

under consideration at NGS, and it triggered a key commitment by the United States to work 

with the Community to address the very real impacts of the proposed changes to NGS mandated 

by the BART Rule. The Community does not view the BART Rule as fully satisfying the United 

States' obligations to the Community given the significant cost that imposing BART at NGS will 

have on the Community. Thus, EPA's BART selection was the best first step in what will be an 

ongoing process to mitigate impacts on the Community.] [EPA has an express trust responsibility 

to protect the water rights that the AWSA provides to the Community. Section 204(a)(2) of the 

AWSA states: "the water rights and resources described in the Gila River Agreement shall be 

held in trust by the United States on behalf of the Community . . . ." The AWSA authorized, 

ratified and confirmed the Gila River Agreement, and therefore creates these water rights, which 

constitute a trust resource].

Response 26: The promulgation of the BART Rule for NGS and the final Clean Power Plan rule 

are two separate and distinct rulemakings. The EPA acknowledges that both rules may impact 

the cost of operating NGS which may in turn impact the cost of water under the CAP; however, 

the EPA believes that it is important to treat EGU located in areas of Indian country under the 

Clean Power Plan in essentially the same way that it treats EGU located outside of Indian 

country. As a result, in the final rule, EPA establishes emission performance rates for the four 

EGU located in Indian country and mass- and rate- based performance goals for each of the three 

affected areas of Indian country using the same methodology (the application of BSER) it used 
25

in establishing rates and goals relating to EGU located outside of Indian country. At this time 

EPA has no way of knowing precisely how the two rules will impact NGS as that will depend on 

which BART compliance option the owners/operators of NGS choose and on the structure of any 

implementation plan. Please see section XII.F of the preamble to the final rule for a discussion 

of EPA’s interactions with various Indian tribes concerning the Clean Power Plan.

Comment 27: Commenters urged EPA to redesign and repropose its treatment of the UintahOuray Reservation and the Bonanza Station. Specifically, commenters stated that to the extent 

EPA has authority to adopt goals for the reservation and Bonanzas Unit One, those goals must 

reflect only cost-effective, technically feasible heat rate improvements (HRI) that can be made at 

that unit. Commenters stated that adjustments must be made to the standards set forth under the 

Supplemental Proposal for the Uintah-Ouray Reservation, with flexible and achievable 

accommodation to allow for Deseret and the Bonanza Unit's unique circumstances.

Response 27: In the final rule, EPA establishes emission performance rates for the four EGU 

located in Indian country, including the Bonanza Station, and mass- and rate- based performance 

goals for each of the three affected areas of Indian country, including the Uintah-Ouray 

Reservation, using the same methodology (the application of BSER) it used in establishing rates 

and goals relating to EGU located outside of Indian country. The question of how those 

provisions may ultimately be implemented is outside the scope of the final rule. 

Comment 28: Commenters stated the Supplemental Proposal reflects additional emission 

reductions, beyond those the proposal posits under building block one for the Bonanza unit, for 

potential demand-side efficiency improvements that could be achieved through programs 

involving end-use consumers within the Reservation. Commenters explained that because no 

such improvements could be mandated or achieved on the Reservation, the Bonanza unit would 

be required to reduce carbon dioxide emissions even more than under building block one for the 

Reservation to meet the goal that EPA has calculated (under blocks one and four) for the 

Reservation. Commenters stated (verbatim) “that EPA's building block four proposal is flawed 

for the same reason that applying building block three to the Reservation would be flawed. Just 

because some states have been able to implement energy efficiency programs does not mean that 

a low-income, sparsely populated Indian Reservation which lacks the management infrastructure 

that States have, could do the same. The record contains no information as to how the Tribe or 

EPA would go about attaining EPA's assumed reductions in electricity consumption. Nor does 

the record contain any evidence as to whether the Tribe would even have authority to implement 

energy efficiency programs on the Reservation, particularly as to the vast majority of load 

located there, which consists of non-tribal concerns operating on non-tribal lands (BLM or fee 

lands) which lie within the exterior boundary of the historic Reservation. EPA's authority under 

the Clean Air Act to regulate activities on Indian Country derives solely from, and is co-terminus 

with, the authority vested in the Tribe.["Because the EPA may administer a federal program only 

"in the shoes of a tribe or the shoes of [a] state...", it can exercise no more jurisdiction than could 

the tribe or state whose shoes it fills. Oklahoma Dept. Environmental Quality v. EPA, 740 F.3d 

185 (D.C. Cir. 2014), quoting Michigan v. EPA, 268 F.3d at 1085.] That authority is limited with 

regards to activities of non-tribal members such as [Commenters] and others operating on non-
26

tribal trust lands. In the seminal case of Montana v United States, 450 U.S. 544 (1981), the 

Supreme Court established the "general proposition that the inherent sovereign powers of an 

Indian tribe do not extend to the activities of nonmembers of the tribe" Id. With regard to nontribal industrial electric load (oil, gas, etc.) operating on BLM lands or on their privately owned 

fee lands within the historic reservation boundaries, [Commenters] also believe that those endusers generally have no business or other relationships sufficient to extend tribal jurisdiction to 

regulate their non-tribal activities.[Even if the non-tribal businesses engaged in industrial 

activities on fee or other non-tribal lands within the reservation boundaries have entered into 

some form of agreement with the tribe permitting entry onto tribal lands, Montana's consensual 

relationship exception requires that any regulation imposed by the Indian tribe have a nexus to 

the consensual activity itself. "A nonmember's consensual relationship in one area does not 

trigger tribal civil authority in another . . . . " Atkinson v Shirley, 532 U.S. 645 (2001).] The 

Supreme Court has directed that "the exercise of tribal power beyond what is necessary to protect 

tribal self-government or to control internal relations is inconsistent with the dependent status of 

the tribes, and so cannot survive without express congressional delegation." Montana, 450 U.S. 

at 544. The Supplemental Proposal goes well beyond the narrow delegated congressional 

authority to regulate air emissions at the source. The Proposal contemplates plans similar to 

those to be developed by states under the Proposed Rule (for state jurisdictional emission 

sources), including provisions to mandate, promote, and regulate energy efficiency reductions, 

re-dispatch decisions among and between electric generation resources, etc. These "beyond the 

fence" measures - to the extent applied to any portion of the vast majority of electric load within 

the Reservation carried on by non-tribal entities with non-tribal counterparties, cannot be 

adopted nor enforced by either the Tribe nor by EPA acting in its role for the Tribe under the 

Clean Air Act. Although a Tribe may exercise a very limited civil jurisdiction to safeguard 

against injury to the welfare of tribal members, this authority is extremely limited, in the absence 

of express congressional authorization. Clearly, concerns over the global climate effects of 

carbon dioxide do not warrant and cannot justify expanded civil jurisdiction over [Commenters] 

and/or the Bonanza Unit 1. In order to support civil jurisdiction over conduct potentially 

affecting the health or welfare within the tribal lands, the conduct in question "must do more than 

injure the tribe, it must 'imperil the subsistence of the tribal community.'” Commenters have 

noted that 'th[e] elevated threshold for application of the second Montana exception suggests that 

tribal power must be necessary to avert catastrophic consequences."[Plains Commerce Bank v 

Long Family Land & Cattle Co., 554 U.S. 316 (2008)]

Response 28: In the final rule, EPA establishes emission performance rates for the four EGU 

located in Indian country, including the Bonanza Station and mass- and rate- based performance 

goals for each of the three affected areas of Indian country, including the Uintah-Ouray 

Reservation, using the same methodology (the application of BSER) it used in establishing rates 

and goals relating to EGU located outside of Indian country. BSER as identified in the preamble 

to the final rule does not include Building Block 4. See, section V. of the preamble to the final 

rule for a detailed discussion of what constitutes BSER. The remainder of the comment 

addresses issues that are beyond the scope of the final rule which, as presented above, establishes 

performance rates and mass- and rate-based goals and also establishes provisions governing the 

development and approval of state, tribal and federal plans implementing the final Emission 

Guidelines, but does not address the specific mechanism for implementing the Emission 

Guidelines in a particular area. The EPA does note, however, that CAA section 301(d) 

constitutes a Congressional delegation of authority to Indian tribes to exercise Clean Air Act 
27

authority over all areas within the exterior boundaries of a tribe’s reservation regardless of the 

ownership status of any particular parcel of land.

Comment 29: Commenters stated that EPA's application of building block four to the UintahOuray Reservation contains a basic methodological flaw. Commenters explained that in what 

EPA calls "Step 5" for developing the proposed carbon dioxide standard on the Uintah-Ouray, 

EPA uses the figure of 470,007 MWh to represent a projection of sales of electricity within the 

Uintah-Ouray reservation.["2012 Total MWh (+7.51% T&D losses)" identified in Appendix 1 to 

the Technical Support Document to the Supplemental Proposal.] Commenters stated they do not 

understand how EPA calculated or derived this figure, explaining that unlike the figures denoted 

for other Indian and US Territory resources, this figure, which is intended to represent a 

projection of sales of electricity within the Uintah-Ouray reservation appears simply as a plugged 

figure. Commenters said EPA admits that the Ute Tribe did not report any quantity of electricity 

sales in its submissions to EIA, see Table 2 to Technical Support Document, p. 3. Commenters 

continued (verbatim) “the Supplemental Proposal reflects a reduction from the historic 2012 

baseline emission rate for Bonanza Unit 1 to estimate and reflect potential EER efficiency 

improvements that could be achieved through programs involving end-use consumers within the 

Reservation. EPA's only reference provided for how/where it derived the figure of 470,007 MWh 

of "2012 Total MWh" for the UTE (Uintah-Ouray) resource is as follows: "Projected annual 

electricity sales by region are included in the supporting technical files to this TSD.." See TSD p. 

3. As previously noted, unlike the amounts of sales listed for each of the other tribal facilities and 

U.S. Territories, the stated (assumed) figure of 470,007 MWh for the Ute tribal resource is 

merely a plugged amount entered without explanation, support, or citation to any reference. EPA 

either has made an uneducated "guess" what the amount of retail load is on the Ute tribal land, or 

it has relied on some information/data source that is not specified and, to [Commenters'] 

knowledge not trustworthy and inaccurate. The EPA's figure of 470,007 MWh grossly overstates 

potential, actual, or forecasted sales of electricity on areas within the Uintah-Ouray reservation. 

[Commenters] Power is the sole provider of wholesale electric power and energy to Moon Lake 

Electric Association ("MLEA"), the distribution utility which provides retail service to customers 

located within the Ute tribal lands. Although there are no detailed data gathered that 

differentiates between electricity consumed within the Ute tribal land and power used on 

adjoining/adjacent communities, [Commenters] obtained data from MLEA concerning total 2012 

sales within areas located on and close to the Reservation.” Commenters presented Figure 2

(titled: “Retail Sales by MLEA on areas within and adjacent to Uintah Ouray Reservation 

(Calendar Year 2012)” which provided the retail MWh sales for all area south of Hwy 40 (114, 

443 MWh) and tribal lands north of Hwy 40 (14,580 MWh). Commenters stated the total, 

aggregate combined wholesale power load within the areas listed in Figure 3 include some 

electric load that is used outside the Reservation, but furnished through shared distribution 

facilities extending partially into the Reservation. Commenters stated the retail sales figures 

therefore very likely overstate actual sales within the Reservation. Commenters stated as Figure 

3 shows, retail sales within the Reservation do not approach 470,007 MWh in a single year. For 

the year 2012, the total annual metered load at these distribution facilities totaled 129,023 MWh. 

Although there is no basis for EPA to apply building block four to the Reservation, to the extent 

EPA does so, it must lower the "Step 5" adjustment for the Ute tribal lands by reducing its 

470,007 MWh figure found in Appendix 1 and Appendix 2 to the Supplemental Proposal TSD. 
28

[Commenters] urged EPA to lower the "Step 5" adjustment for the Ute tribal lands by reducing 

its 470,007 MWh figure found in Appendix 1 and Appendix 2 to the Supplemental Proposal TSD 

to a more realistic figure of 130,000 MWh. [Commenters] believed the 130,000 MWh to still be 

artificially too high, and repeats its concerns with respect to the limited nature of authority that 

the Tribe (and therefore EPA) may exercise over the vast majority of these sales. Commenters 

stated that by far the majority - probably 90 % of electric use on tribal land - involves non-tribal 

members, primarily oil and gas development by entities that neither engage in business with the 

Tribe or its members, nor would be subject to Tribal regulation concerning the operation, 

configuration, or nature of business undertaken and equipment operated within the exterior 

boundaries of the Reservation.

Response 29: In the final rule, EPA establishes emission performance rates for the four EGU 

located in Indian country, including the Bonanza Station and mass- and rate- based goals for 

each of the three affected areas of Indian country, including the Uintah-Ouray Reservation, using 

the same methodology (the application of BSER) it used in establishing rates and goals relating 

to EGU located outside of Indian country. BSER as identified in the preamble to the final rule 

does not include Building Block 4. See, section V. of the preamble to the final rule for a detailed 

discussion of what constitutes BSER. See sections VI. And VII. of the preamble to the final rule 

for a discussion of how EPA derived the emission performance rates and the mass- and ratebased performance goals, respectively.

Comment 30: Commenters stated that the Proposed Rule as well as the Supplemental Proposal 

establishes a compliance implementation schedule from 2020 through 2029, with full compliance 

required by 2029. Commenters believed the EPA should eliminate the Interim Goal for the Ute 

jurisdiction for the following reasons (verbatim): “The Ute Tribe of the Uintah-Ouray 

Reservation is a very small entity with extremely limited resources. The Tribe does not have and 

has not applied for Clean Air Act regulatory authority, and has little in place as infrastructure to 

support its own environmental regulatory administrative authority. EPA Region 8 has issued all 

federal permits pertaining to Clean Air Act in the past. It is unlikely that the Tribe will have 

sufficient time and resources to develop a carbon dioxide plan; EPA will most likely be called 

upon to do so. EPA, however, cannot, as it apparently assumes, simply step in and impose a 

Section 111(d) plan for the reservation. EPA has no independent jurisdiction over clean air 

matters in tribal lands; its only source of such authority is purely derivative of authority vested in 

the Tribe.[Oklahoma Dept. Environmental Quality v. EPA, 740 F.3d 185 (D.C. Cir. 2014).]” 

Commenters stated the Tribe has more limited authority over certain non-tribal activities than a 

state. For instance, [Commenters] have previously noted that implementing building block four 

requirements within the Reservation boundaries would not only be a dauntingly complex 

process, it would be beyond the power or authority of the Tribe in all events, at least with respect 

to efficiency programs and/or renewable resource requirements intended to reach non-tribal 

concerns engaged in non-tribal activity on fee lands or other non-tribal lands -- the vast majority 

of electric end users within the Reservation. Commenters stated the Tribe has no authority to 

dictate energy efficiency measures that multi-state oil and gas operators must undertake where 

such operators have no business dealings with the Tribe or tribal members. Commenters stated 

EPA has never undertaken the necessary rulemaking, notice and/or comment with respect to any 

assertion under the Clean Air Act concerning the status of particular parcels of property within 
29

the Reservation boundary. Commenters stated EPA issued the Supplemental Proposal without 

first undertaking proposed rulemaking, notice, or fact finding necessary. Commenters stated it is 

not practical that the Supplemental Proposal could be finalized, the Tribe given necessary time to 

analyze it, and EPA create a proposed compliance plan, and then [Commenters] to challenge the 

jurisdictional basis during the remaining period before the Interim Period would begin. [As a 

non-party to the Ute Tribe litigation which led to the Tenth Circuit's 1985 en banc decision 

known as "Ute III", 773 F.2d 1087, [Commenters] would be entitled to an opportunity to raise 

the issue of the subsequent U.S. Supreme Court statutory interpretation found in the Hagen 

decision, 510 U.S. 399 (1995), which was not, nor could not have been, presented by the parties 

to the litigation that culminated ten years earlier. Commenters stated as a non-party to the 

litigation, EPA and/or the United States would have difficulty asserting issue preclusion against 

another non-litigant. Moreover, the subsequent Supreme Court precedent in Hagen has not been 

addressed by the courts in the context of a lawsuit commenced after the final mandate of the Ute 

III case involving facts specifically pertaining to Indian country jurisdiction within the 

Uncompahgre portion of the Uintah and Ouray Reservation. Commenters stated the 10th Circuit 

has subsequently recognized the error in its own statutory interpretation in Ute III, see "Ute Tribe 

V", 114 F.3d 1513 (10th Cir. 1997), and presumably would now decide that the portion of the 

Reservation once known as the Uncompahgre, on which Bonanza is located, has been 

diminished or disestablished. Commenters stated the appellate court was prevented from altering 

its earlier mandate only by virtue of the fact that no present case or controversy was presented to 

the Court in Hagen concerning the Uncompahgre portion of the Reservation.][EPA does not 

address the jurisdiction of the Tribe over non-tribal activities on non-tribal lands. The inquiry as 

to what constitutes "Indian Country" for purposes of CAA jurisdiction is the same as the 

definition set forth in 18 U.S.C. section 1151. That statute provides that property within the 

exterior boundary of an Indian Reservation is not necessarily "Indian Country" unless it also is 

"under the jurisdiction of the United States Government." Id. Most of the non-tribal electric load 

(and the large majority of the total load) within the Reservation takes place on BLM lands. 

However, BLM does not actively manage those lands for the benefit of the Tribe; rather, the 

BLM's purpose for "actively control[ing] the lands in question," is definitively not for the 

purpose of "effectively acting as a guardian for the Indian," see Hydro Resources, Inc. v. U.S. 

E.P.A.608 F.3d 1131, 1149 (10th Cir. 2010). As a result, the Indian Country superintendence 

requirement is not necessarily satisfied with respect to those lands. Correspondingly, that also 

means that BLM lands are not all "under the jurisdiction of the United States Government," as is 

necessary for Indian Country status. EPA has made no determination as to the status of specific 

parcels of land within the Reservation that are administered by the BLM and with respect to 

which the BLM is not "effectively acting as a guardian for the Indian," see Hydro Resources, 608 

F.3d at 1149, and whether those parcels can be within Indian Country as defined by section 

1151.8 These BLM lands stand in stark contrast to other types of land located within the exterior 

boundaries of the historic Reservation to which Congress stated: "Title to any lands and rights 

acquired hereunder shall be taken in the name of the United States in trust for the Ute Indian 

Tribe of the Uintah and Ouray Reservation, Utah, and such lands or rights shall be exempt from 

State or local taxation." 62 Stat. 78 (emphasis added). Those tribal lands held in trust clearly fall 

"under the jurisdiction of the United States Government."]

Response 30: The comments are outside the scope of the final rule as they address the 

implementation of the final Emission Guidelines. The final rule establishes emission 

performance rates for individual EGU and mass- and rate-based performance goals for relevant 
30

geographic areas and establishes requirements for state, tribal and federal implementation plans, 

but does not address the specific mechanism for implementing the Emission Guidelines in a 

particular area. The EPA notes, however, that CAA section 301(d) constitutes a Congressional 

delegation of authority to Indian tribes to exercise Clean Air Act authority over all areas of the 

tribe’s reservation regardless of the ownership status of any particular parcel of land.

Comment 31: Commenters stated Section 111(d) prohibits EPA from adopting emission 

guidelines for existing sources from a source category when the Agency has already regulated 

that source category under section 112. CAA section 111(d)(1)(A)(i). Commenters elaborated

that EPA listed coal- and oil-fired EGUs as a "source category" under section 112 in 2000, 65 

Fed. Reg. 79,825, 79,826, 79,831 (Dec. 20, 2000), and regulated emissions from these sources in 

2012 under the MATS rule, 77 Fed. Reg. 9304 (Feb. 16, 2012), and because EPA has already 

promulgated a national emission standard for existing coal-fired power plants under section 112, 

it may not promulgate the emission guidelines it has proposed here.

Response 31: Please see section IV. of the preamble to the final rule for the EPA’s response to 

this comment.

Comment 32: Commenters stated that the supplemental proposal would violate commenters' 

rights under the Fifth Amendment as an uncompensated taking of property will result. 

Commenters explained that if, as a result of the Supplemental Proposal, a tribal or EPA 

sponsored plan were promulgated which makes it impossible for commenters to comply with its 

debt obligations, and/or which forces commenters to pay fees, purchase credits, or forego 

substantial generation from Bonanza Unit 1 in order to comply and meet the goals set forth in the 

Supplemental Proposal, the severe curtailment and/or imposition of unrecoverable and 

economically unviable fees will result in a partial taking. Commenters remarks asserted that the 

Fifth Amendment of the Constitution prohibits the taking of "private property . . . without just 

compensation." U.S. CONST. amend. V. The Supreme Court long ago extended the takings 

concept to regulation that goes too far: "The general rule . . . is that while property may be 

regulated to a certain extent, if regulation goes too far it will be recognized as a taking." Pa. Coal 

Co. v. Mahon, 260 U.S. 393, 415 (1922). Commenters stated regulations that "completely 

deprive an owner of 'all economically beneficial use' of her property" constitute a per se taking. 

Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538 (2005) (quoting Lucas v. S.C. Coastal Council, 

505 U.S. 1003, 1019 (1992)). Commenters argued that partial takings must also be compensated. 

Commenters added such a partial taking exists where certain factors can be found to suggest that 

regulation goes too far, specifically, (1) the character of the government action; (2) the economic 

impact of the regulation on the claimant; and (3) the extent to which the regulation interferes 

with distinct investment-backed expectations. Penn Cent., 438 U.S. at 124. Commenters stated

that severely limiting the capacity or remaining useful life of Bonanza Unit 1 will constitute a 

taking giving rise to constitutional obligation to compensate Commenters. Commenters stated 

the Penn Central factors are "designed to allow 'careful examination and weighing of all the 

relevant circumstances.'" Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 535 

U.S. 302, 322 (2002) (quoting Palazzolo v. Rhode Island, 533 U.S. 606, 636 (2001) (O'Connor, 

J., concurring)). Commenters added that the factors focus "directly upon the severity of the
31

burden that government imposes upon private property rights." Lingle, 544 U.S. at 539. 

Commenters stated if as a result of a tribal or EPA sponsored plan as contemplated by the 

Supplemental Proposal, commenters are forced to significantly curtail the operations of Bonanza 

Unit 1, commenters and the economically challenged rural member consumers who depend on 

the unit for sustained energy needs in their communities are entitled to due compensation from 

the regulating authority enacting or promulgating such plan.

Response 32: The comments are outside the scope of the final rule as they address possible 

consequences of the implementation of the final Emission Guidelines. The final rule establishes 

emission performance rates for individual EGU and mass- and rate-based performance goals for 

relevant geographic areas and establishes requirements for state, tribal and federal 

implementation plans, but does not address the specific mechanism for implementing the 

Emission Guidelines in a particular area.

Comment 33: Commenters stated the Supplemental Proposal attempts to claim for EPA, acting 

in its derivative role on behalf of the Tribe, broad authority to establish standards and promulgate 

plan(s) that necessarily implicate and intrude on strictly State jurisdictional matters involving 

commenters' electric utility resource siting, permitting, planning, dispatch and utilization, etc. 

Commenters believed that by far the majority of consumers served by their Bonanza Unit 1 live 

in communities far removed from the Reservation, and the orderly regulation of utility operations 

within the State of Utah and surrounding states where these rural consumers work, carry on 

business and farming, invest in community and economic development, and rely on commenters' 

stable supply of electric power falls squarely within the purview of the States to regulate. 

Commenters believed the Supplemental Proposal would revise and invade authority and 

oversight of the electric utility industry as established by state law; allowing the Tribe (or EPA 

acting in its limited role for the Tribe under the CAA) to exercise significant utility regulatory 

command and control through a plan enforced and administered entirely differently than the 

traditional utility governance as created and clearly delineated by Congress and the Tenth 

Amendment.

Response 33: The comment is outside the scope of the final rule as it addresses the 

implementation of the final Emission Guidelines. The final rule establishes emission 

performance rates for individual EGU and mass- and rate-based performance goals for relevant 

geographic areas and establishes requirements for state, tribal and federal implementation plans, 

but does not address the specific mechanism for implementing the Emission Guidelines in a 

particular area.

Comment 34: Commenters stated the Section 111(d) rule proposal seeks to require federal 

regulation of even a greater portion of, and additional aspects of, the total electricity generation 

and distribution market. Commenters argued that this decision clearly indicates that the federal 

government, whether through FERC or U.S. EPA, does not have unbounded authority to regulate 

electric markets that traditionally have been left to the states.
32

Response 34: Please see sections III. And IV. of the preamble to the final rule for the EPA’s 

response to this comment. Further, we disagree that we are expanding our authority to include 

wholesale energy market regulation or state retail regulation. Our emission guidelines simply 

reflect an achievable emissions limit through the application of the BSER and do not in 

themselves require states or sources to implement the BSER. Moreover, these emission 

guidelines provide states with the flexibility to establish, implement, and enforce standards of 

performance and do not intrude on the regulatory domain of FERC or the states nor is it further 

expanding federal regulation over electricity generation and distribution. It cannot be said that 

because environmental requirements may have an effect on the wholesale energy markets or 

retail markets that the EPA is therefore intruding into energy regulation. Certainly, in the 

legislative history of the 1970 CAA Amendments, Congress expressly identified power plants as 

a priority source category for regulation under CAA section 111. 

Comment 35: Commenters stated the Supplemental Proposal does not specify nor address how 

the statutory provision of 111(d) concerning the determination and consideration of the Bonanza 

Unit's "Remaining Useful Life" would be addressed, and EPA does not specify the authority nor 

does it identify the process or procedure that would be used to ensure that any proposed standard 

upheld and protected the "state's" role in making such a determination, and the flexibility to take 

the same into consideration. Commenters added that EPA does not address the authority of either 

EPA or the Tribe to make such a determination or to incorporate plan provisions to protect the 

remaining useful life. Commenters stated that the Proposed Rule appears to justify significantly 

curtailing, if not foregoing, state discretion to consider remaining useful life and other factors in 

developing a state plan. Proposed Rule. at 34,925-26 Commenters stated EPA first asserts that 

deviating from the Proposed Guidelines based on remaining useful life or other factors is simply 

unnecessary given the flexibility EPA has designed into the Proposed Guidelines. Id. at 34,925. 

Commenters stated EPA points out that, with respect to states where multiple units are affected, 

states can adjust requirements applicable to specific EGUs to accommodate their needs and make 

up for any adjustments to apply less stringent requirements to one EGU by making requirements 

for other EGUs (or other entities) more stringent. Commenters argued that this first position fails 

in the case of the Uintah-Ouray reservation and the Supplemental Proposal, explaining that EPA 

must accommodate commenters by adjusting the Supplemental Proposal in regards to this 

requirement, either by engaging commenters directly to arrive at suitable flexible adjustments to 

any proposed requirement, or by altering the Supplemental Proposal to describe with 

particularity a workable process and procedure whereby the very adjustments EPA points to for 

accommodating specific EGU's (in this case the only EGU) within the Uintah-Ouray. 

Commenters continued, stating that EPA argues that it can alter the state's authority to take 

remaining useful life into account and to deviate from or adjust EPA's emission guideline 

because the emission guideline the Agency has proposed differs so dramatically from the usual 

"presumptive standard of performance that must be fully and directly implemented by each 

individual existing source within a specified source category." 79 Fed. Reg. at 34,925. 

Commenters asserted that this statement, even if valid for states with multiple operating units, 

also misses the mark for the single-unit operating within the Uintah-Ouray, explaining that the 

proposed performance standard for the Uintah-Ouray set forth in the Supplemental Proposal, 

without significant modification to the Proposal, indeed would and does act precisely as a 
33

'presumptive standard of performance that must be fully - implemented by [the] individual 

existing source." Commenters said that source is the Bonanza Unit. Commenters concluded, 

stating the Supplemental Proposal must be significantly modified to address and include much 

more flexible and case-specific consideration.

Response 35: Please see section III. And IV. of the preamble to the final rule for a discussion of 

the legal basis for the final rule. 

Comment 36: Commenters stated the Supplemental Proposal, and the Proposed Rule on which it 

is based, relies in numerous respects on EPA's assumption that utilities may achieve the stated 

goal by, among other things, achieving more than the required/assumed improvement in carbon 

dioxide emissions at some units, in order to achieve, on a fleet-wide basis, the proposed interim 

and final goals. Commenters remarked that whereas large utilities own numerous jurisdictional 

EGUs that may make such an approach feasible, commenters do not. Thus, commenters stated, 

they cannot employ the type of optional solutions cited by EPA as justification for assumptions 

used to derive the goals for the Uintah-Ouray Reservation. Commenters offered, for example, 

that EPA asserts that affected operators within each state can implement both plant-wide and 

fleet-wide measures to achieve emission reduction requirements. Commenters stated, however, is 

the only jurisdictional entity and has only one generating unit within the Uintah-Ouray. 

Commenters said that EPA points to measures including implementing methods for HRI on 

EGUs at the same plant or at other plants within the generation fleet, thereby eliminating or 

mitigating circumstances at some units which have previously upgraded by implementing 

potential HRI projects. Commenters argued this reasoning cannot apply to Bonanza; since, 

Bonanza already undertook the largest and most promising of such HRI projects well before 

2012, and commenters have no other jurisdictional unit(s) on which to effectuate such future heat 

rate improvements, and thus, EPA's "averaging" logic fails where, as here, there is but one unit, 

one operator, one single jurisdiction.

Response 36: The comments are outside the scope of the final rule as they address the 

implementation of the final Emission Guidelines. The final rule establishes emission 

performance rates for individual EGU and mass- and rate-based performance goals for relevant 

geographic areas and establishes requirements for state, tribal and federal implementation plans, 

but does not address the specific mechanism for implementing the Emission Guidelines in a 

particular area. The EPA notes, however, that many of the concerns expressed by the 

commenters can be addressed through participation in a multi-jurisdictional plan. See section 

VIII.L of the preamble to the final rule for a full discussion of multi-jurisdictional plans.

Comment 37: Commenters stated no generating resources exist other than the Bonanza unit on 

the Uitnah-Ouray Reservation; there is no unused or under-utilized capacity of NGCC, Nuclear, 

or other resources. Commenters concluded that given that there exists but one single generating 

resource, there does not exist unused or available transmission capacity of any magnitude to 

support significant development of alternative generating resources within the Reservation, and 

the geographic isolation of the Reservation from any large population center and the lack of 

significant electric transmission capacity make future development of additional resources 
34

extremely costly, and improbable. Commenters concluded that the only way that the reservation 

can achieve EPA's assigned goal is through HRI at Bonanza Unit 1, and thus, possibly among 

every jurisdiction affected by EPA's Section 111(d) rule, the Uintah-Ouray reservation has the 

least - indeed, has no - flexibility in implementing the rule's requirements. Commenters stated

that because EPA views flexibility as such an important aspect of the rule, the lack of flexibility 

for the reservation demonstrates that the rule does not meet the standard of reducing carbon 

dioxide emissions in a cost-effective manner.

Response 37: The comment is outside the scope of the final rule as it addresses the 

implementation of the final Emission Guidelines. The final rule establishes emission 

performance rates for individual EGU and mass- and rate-based performance goals for relevant 

geographic areas and establishes requirements for state, tribal and federal implementation plans,

but does not address the specific mechanism for implementing the Emission Guidelines in a 

particular area. The EPA notes, however, that many of the concerns expressed by the 

commenters can be addressed through participation in a multi-jurisdictional plan. See section 

VIII.L of the preamble to the final rule for a full discussion of multi-jurisdictional plans.

Comment 38: Commenters stated EPA used the same assumption for HRI at Bonanza that it 

used generically in its original proposal, that is, that coal-fueled EGUs can improve their heat 

rate by 6% or, alternatively, 4%. Commenters noted that as demonstrated in comments on that 

proposal by NRECA and others, these estimates far overstate the ability of the industry as a 

whole to improve heat rate. Commenters explained that for the Bonanza Unit 1, these estimates 

are based on no actual data or analysis at all, and EPA did not examine whether commenters had 

already undertaken all or some of the capital or operating and maintenance programs that EPA 

relied on in developing its generic industry HRI estimates. Commenters added that EPA did not 

ask the plant operator to supply it with any specific information about the unit, and EPA did not 

examine specific possible HRI projects for the Bonanza unit and whether any would or would 

not be cost-effective. Commenters also added that EPA did not offer any explanation as to why it 

thinks that its generic industry-wide assumptions apply to Bonanza Unit but rather that EPA 

simply assumed that its generic building block one analysis should apply to Bonanza, and that 

assumption, however, does not constitute substantial evidence and is arbitrary. Commenters 

added that the Proposed Rule analyzes potential HRI measures and offered the following among 

its proposed conclusions: "By applying best practices to their operating and maintenance 

procedures, owners and operators of EGUs could reduce heat rate [by an] estimated range of 1.3 

percent to 6.7 percent technical potential for improvement in the average heat rate of the entire 

fleet of coal-fired EGUs." [Proposed Rule, at 79 FR 34856] Commenters stated that by applying 

its "fleet-wide averaging" logic, EPA concludes that for states where fleet-wide averaging would 

be appropriate, that operators could achieve an "average" 4% assumed HRI improvement 

through adoption of "best practices" of operating and maintenance procedures. Commenters

explained that fleet-wide averaging, or assumptions based on fleet wide logic are not easily 

translated to a single unit such as Bonanza Unit 1, and, moreover, use of assumptions based on 

data culled from fleet-wide observations is particularly inappropriate and arbitrary to apply to the 

Bonanza Unit, which has a demonstrated performance track record well above average. 

Commenters believed that for the goal to be sustainable as achievable, EPA must analyze and 
35

assess the technical potential HRI improvements at Bonanza Unit 1 as a stand-alone single unit. 

EPA did not do so.

Commenters believed that for Bonanza Unit 1, the HRI is especially arbitrary, and given EPA's 

own analysis, concludes that rigorous operating/maintenance practices may only be able to 

achieve as little as 1.3 percent technical potential HRI improvement at any given 

unit.5 Commenters believed that the proposed standard for the Uintah-Ouray reservation should 

be revised to reflect no more than a 1.3 percent HRI improvement which presumably might be 

achieved on account of better or "best" operating and maintenance practices at Bonanza Unit 1.

Commenters stated the assumption of a total 6% HRI that could be achieved at Bonanza Unit1 is 

unsupported and unsupportable, given that they has already implemented the specific projects on 

which EPA relied in assuming the amount of HRI that is achievable at Bonanza Unit 1. 

Commenters offered, for instance, that they already incorporate significant best 

operating/maintenance practices, and the HRI resulting from those practices are already reflected 

in the Bonanza unit's historical emissions. Commenters added that they are noted as a very 

efficient operator of the Bonanza Unit, and Bonanza is routinely recognized as maintaining one 

of the highest operating and maintenance levels in the nation for units of similar characteristics; a 

fact reflective of the high level of maintenance and superior operating practices already 

employed at Bonanza. To illustrate the comparatively high level of attention that operators give 

to procedures and maintenance concerns, commenters provided the comparative information on a 

table, Figure 1 (titled: “Bonanza Unit 1 - Generating Availability Data Comparison to Similar 

Operating Units”. Commenters explained that as demonstrated in Figure 1, Bonanza already 

operates at levels that demand the best practices of operation and maintenance; Bonanza 

routinely takes measures cited in the Proposed Rule, including "practices such as turning off 

unneeded pumps at reduced loads, installation of digital control systems, more frequent tuning of 

existing control systems, or earlier like-kind replacement of worn existing components..." For 

example, Bonanza typically schedules planned maintenance cycles that are shorter than other 

coal units. Commenters listed a number of specific "best practices" already utilized and 

implemented by commenters at the Bonanza Unit well before the 2012 baseline period selected 

by EPA. In addition, commenters have implemented capital projects resulting in HRI well 

before the issuance of the Proposed Rule. Commenters explained that they have already spent 

considerable capital on increasing the efficiency at Bonanza Unit 1. Commenters continued, 

stating that EPA relied on a 2009 Sargent & Lundy ("S&L") Report that examined potential HRI 

projects. Commeters stated that Bonanza incorporated most of such projects well before any 

baseline period for determining carbon dioxide emissions goals under the Supplemental 

Proposal. The commenters included a lists O&M practices employed at Bonanza Unit 1 and 

Equipment Efficiency Improvements at Bonanza Unit 1, which the commenters stated "illustrate 

that Bonanza Unit 1 has already incorporated and uses a majority of identified efficiency 

practices and measures set forth in the EPA Proposed Rule and the 2009 Sargent & Lundy 

Report." Commenters believed the carbon standard for the Uintah-Ouray Reservation should not 

be artificially made more stringent on account of the early actions taken at Bonanza 1 to achieve 

efficiency improvements and manage carbon emissions prior to the baseline period for the 

Supplemental Proposal. Commenters closed, stating that the Proposed Rule states that EPA 

"recognize[s] that individual EGUs would only be able to implement the best practices or 

upgrades that were applicable to their specific designs or fuel types and that had not already been 
36

implemented." [Proposed Rule at 34859] yet, EPA has not addressed inherent penalty assessed to 

early actors in the Proposed Rule.

Response 38: As to the comment regarding the achievability of the assumed HRI *** The 

comment is otherwise outside the scope of the final rule as it addresses the implementation of the 

final Emission Guidelines. The final rule establishes emission performance rates for individual 

EGU and mass- and rate-based performance goals for relevant geographic areas and establishes 

requirements for state, tribal and federal implementation plans, but does not address the specific 

mechanism for implementing the Emission Guidelines in a particular area. The EPA notes, 

however, that many of the concerns expressed by the commenters can be addressed through 

participation in a multi-jurisdictional plan. See section VIII.L of the preamble to the final rule 

for a full discussion of multi-jurisdictional plans.

Comment 39: Commenters stated that because EPA's supplemental proposal appears to be 

consistent with the proposal made in the Emission Guidelines for Existing Stationary Sources: 

Electric Utility Generating Units; Proposed Rule; 79 Fed. Reg. 34830 (June 18, 2014), 

commenters recommend that EPA ensure that any changes made to the initial proposal are 

consistently applied to the supplemental proposal.

Response 39: The final rule constitutes final action on both the June 18, 2012 proposed rule and 

the November 4, 2014 supplemental proposed rule (79 FR 65489; November 4, 2014) and the 

final Emission Guidelines present a consistent approach.

Comment 40: Commenters stated in response to EPA's requests for comment on treatment of 

renewable energy, demand-side energy efficiency and other new low- or non-emitting electricity 

generation across international boundaries in a state plan, EPA should allow inclusion of such 

new resources only if the following conditions are met: 1) the new international resources used 

for crediting will result in reduced emissions from fossil-fuel generation in the United States and 

2) that the international resources are not double-counted as a non-emitting or low-emitting 

resource for a regulatory obligation of both the source country and Clean Power Plan 

compliance. Commenters added that EPA should also consider whether such resources are 

reasonably available to adjacent states and can therefore be included in setting targets for those 

states.

Commenters addressed the potential for leakage between states and between new and existing 

generation. Commenters stated EPA should similarly ensure that generation shifts across our 

borders does not allow power plants in the U.S. to comply with the clean power plan without 

actually achieving the anticipated reduction in carbon pollution.

Commenters stated some stakeholders have also expressed interest in how to treat RE and EE 

potential across international boundaries. [79 FR 65496] Commenters stated that for example, 

allowing resources in Canada to be used in meeting an area's goal. Commenters remarked that 

even this proposal, which on the surface does not have any bearing on Ohio, contains concepts 

that U.S. EPA may alternately choose for states not included within this proposal. Commenters 
37

stated this lack of notice and transparent rulemaking would clearly violate the Administrative 

Procedure Act. Commenters believed that due to the complexity of the undertaking, U.S. EPA 

cannot propose pieces of a rule without fully explaining the impacts on all affected parties.

Response 40: See section VIII.L of the preamble to the final rule for a discussion of interstate 

effects and leakage. RE-use response from other comments. As noted above the EPA is not 

including building block 4 (EE) in the definition of BSER in this final rulemaking. See section 

V of the preamble to the final rule for a discussion of BSER as defined and applied in the final 

rule.

Comment 41: Commenters stated that historically environmental rulemaking has been oriented 

to the interests of the states and industry and that environmental regulatory perspectives from 

Indian Country, from the Navajo Nation, are routinely overlooked. Commenters stated that EPA 

is celebrating a 30th year of having an Indian policy and that the 1984 Indian policy and the 1990 

amendments to the Federal Clean Air Act should prevent perspectives from Indian Country from 

being overlooked, however, U.S. EPA today still faces challenges to develop rules that work for 

Indian Country, including the Navajo Nation. 

Commenters stated that the proposed supplemental rule is a good proposal but the Navajo Nation 

recommends a reexamination of the building block approach and an appropriate application of 

building blocks, but only with much better understanding of the conditions on the Navajo Nation.

Response 41: As described in sections III.A and XI.F of the preamble to the proposed carbon 

pollution emission guidelines for existing EGUs (79 FR 34845-34847; June 18, 2014) and 

sections II.D and VI.F of the preamble to the proposed carbon pollution emission guidelines for 

existing EGUs in Indian Country and U.S. Territories (79 FR 65489; November 4, 2014), the 

final CPP was developed after extensive and vigorous outreach to tribal governments. After 

issuing the supplemental proposal, the EPA held additional consultation with tribes as described 

in Section XII.F of the preamble to the final rule. See section V. of the preamble to the final rule 

for a discussion of BSER as defined and applied in the final rule.

Comment 42: Commenters stated the ambiguity in the proposed rule concerning the 

development of a federal implementation plan, if needed raises additional concerns. Commenters 

stated if a state fails to submit a plan or the plan submitted by the state is not approved by EPA 

then the federal government is required to put a federal plan in place for that state. Without 

additional clarity in the rule, commenters assumed that EPA would most likely build the federal 

plan around its preferred BSER, inclusive of Building Block 4. Commenters stated as such, if 

building codes remain an approvable measure under Building Block 4, it is conceivable that the 

federal government would incorporate them into the federal plan, in essence "adopting" a 

building code standard; this is something they clearly have no authority to do.

Response 42: The EPA has provided clarity around state plans in section VIII of the preamble to 

the final rule. Additionally, as noted above, building block 4 is not included in the definition of 
38

BSER for this final rulemaking. See section V of the preamble to the final rule for a discussion 

of BSER as defined and applied in the final rule.

Comment 43: T&T--Unique Circumstances

Commenters noted that EPA did not consider the unique circumstances of the Navajo Nation. 

According to commenters, EPA's fundamental error in its application of Building Block 4 to the 

Navajo Nation was its reliance, in crafting Building Block 4, on data from energy efficiency 

programs in states and regions of the country that have vastly different circumstances from those 

of the Navajo Nation. According to commenters, EPA proposed a program for the Navajo Nation 

based upon what it learned from examination of the state programs but noted that circumstances 

for the Navajo Nation more closely resemble the poorer nations in the world, such as Bangladesh 

or Ghana, than the Navajo Nation's neighboring states or any other state, for that matter. 

Commenters noted that a program that works well for a state may not work for the Navajo 

Nation and is unlikely to do so. In fact, according to commenters, if there is a problem with 

electricity demand on the Navajo Nation, it is that it is too low, not that electricity use is 

inefficient.

Commenters also noted that per capita electricity consumption on the Navajo Nation is well 

below that of any of the states. According to commenters, the purpose of demand-side measures 

is to reduce electricity usage through more efficient devices (LED lights or more efficient 

appliances, for example) or through behavioral changes: however, per capita energy 

consumption on the Navajo Nation is already well below that of any of the states, even the most 

energy-efficient states such as Hawaii and California.

Supplied figures from commenters showing per capita residential and per capita total electricity 

consumption (in MWh/yr), developed from EIA Form 861 data and U.S. Census data and as 

shown, demonstrate that the Navajo Nation already uses far less energy per person than even the 

most energy efficient states.

According to commenters, it is apparent that EPA did not factor in energy usage or ability to pay 

in establishing energy efficiency goals, but it should have. Commenters stated that it is unfair 

and unjust to require a people who use so little electricity and live in extreme poverty to bear a 

burden similar to that of people who use so much more electricity and are in a much better 

position to afford increased electric rates.

Commenters noted that EPA should recognize the Navajo Nation's unique situation and should 

allow it to increase its electricity usage to be closer to that of its neighbors. According to 

commenters, EPA did not evaluate actual electricity demand trends, ability to pay, or per capita 

electricity use in developing its goals under Building Block 4. Commenters noted that this 

proposed approach is very harmful to the Navajo Nation.

At current electricity usage levels, commenters noted that the Navajo Nation economy cannot 

grow, the Navajo Nation cannot develop a modern economy and the Navajo people are confined 

to a state of extreme poverty. According to commenters, the Supplemental Proposed Rule does 
39

nothing to alleviate this condition, but rather exacerbates it. According to commenters, under 

EPA's proposed approach, the Navajo Nation's annual rate of electricity usage shrinks at an 

average rate of about 1.06% per year and the per-capita demand in 2019 drops to only 26% of 

that of its neighbors. Commenters noted that EPA's approach to Building Block 1 reduces the 

electricity usage of the Navajo Nation and makes it an even smaller fraction of what its 

neighbors use, guaranteeing continued poverty levels on the Navajo Nation. According to 

commenters, if the Navajo Nation were to increase its electric energy usage to a level 

comparable to where its neighbors will be in 2029 after application of Building Block 4, it would 

result in an average annual electric energy growth rate or 12.8% over the 17 years from 2012 to 

2029 to a rate of 2,144,947 MWh. Commenters stated "This is what is called the Parity 

Glidepath." Commenters noted that such a high rate of growth is not likely to occur without 

substantial investment, but it demonstrates the disparity that exists between electricity 

availability to the Navajo Nation versus its neighbors. Commenters stated that EPA should have 

accounted for this disparity.

According to commenters , EPA's proposed application of Building Block 4 to the Navajo 

Nation will not reduce CO2 emissions and will increase the cost and decrease the availability of 

electricity on the Navajo Nation, thereby denying the Navajo Nation the possibility of 

developing a modern economy and preventing an improvement in the living standards on the 

Navajo Nation so that they are comparable to the living standards of the states. Commenters 

noted that EPA should develop a goal that would allow the Navajo Nation to follow the Parity 

Glidepath and end up on a par with its neighbors.

Response 43: As noted above, building block 4 is not included in the definition of BSER for 

this final rulemaking. See section V of the preamble to the final rule for a discussion of BSER as 

defined and applied in the final rule.

1.7 ENDANGERMENT FINDING

Comment 1: Commenters stated that the "30%" and "meaningful" reduction criteria are arbitrary 

and capricious because EPA has done no analysis to determine whether such GHG reductions 

will have any effect on air pollution. Commenters contended that EPA has not issued an 

endangerment finding specifically for the 111(d) rule, or any finding or analysis establishing that 

the 30% goal or 'meaningful' criteria are proper CAA criteria. Commenters added that a 30% or 

"meaningful" reduction may be too great or too little, but the public cannot be certain because 

EPA has not justified the reduction or provided analysis or information on what impact, if any, 

the Rule will have on EPA's stated purpose of limiting climate change. 79 Fed. Reg. 34,838-

34,841. Commenters stated EPA cites the 2009 Endangerment Finding, 74 Fed. Reg. 66,496 

(Dec. 15, 2009) and lists a variety of potential impacts from GHG emissions, but does not 

quantify the benefits or justify its 30% or "meaningful" target. 

Commenters added that the Rule is arbitrary and capricious, constitutes an abuse of discretion, 

and is otherwise not in accordance with law.
40

Response 1: First, an endangerment finding would not be the point at which EPA considers 

specific standards. Second, the climate benefits of CPP have been estimated by applying the 

social cost of carbon (SCC) (see the Regulatory Impact Analysis for full details). The SCC is a 

metric that estimates the monetary value of impacts associated with marginal changes in CO2

emissions in a given year. It includes a wide range of anticipated climate impacts, such as net 

changes in agricultural productivity and human health, property damage from increased flood 

risk, and changes in energy system costs, such as reduced costs for heating and increased costs 

for air conditioning. It is typically used to assess the avoided damages as a result of regulatory 

actions (i.e., benefits of rulemakings that have an incremental impact on cumulative global CO2

emissions). Third, the commenters mischaracterize what is required under this section of the Act. 

Under Section 111d of the Act, state plans must establish standards of performance that reflect 

the degree of emission limitation achievable through the application of the “best system of 

emission reduction” (BSER) that, taking into account the cost of achieving such reduction and 

any non-air quality health and environmental impact and energy requirements, the Administrator 

determines has been adequately demonstrated.

Comment 2: Multiple commenters submitted a variety of comments arguing that EPA had not 

met its obligation to make an endangerment finding under Section 111(b) and/or that some form 

of endangerment finding requirement arises under Section 111(d) because a Section 111(b) 

standard is a prerequisite for Section 111(d) regulation.

Response 2: First, the comments concerning EPA’s obligation to make an endangerment 

finding under Section 111(b) are not relevant to this rule. Issues related to EPA’s obligation to 

make an endangerment finding under Section 111(b) are addressed in the preamble and 

otherwise in the record for EPA’s 111(b) rule. Second, Section 111(d) contains no requirement 

to make an endangerment finding. Though Section 111(d)(1)(A)(ii) does provide that Section 

111(d) requirements will apply to pollutants “to which a standard of performance under this 

section would apply if such existing source were a new source,” that does not create any 

obligation to make an endangerment finding under section 111(d) or otherwise bring issues 

concerning endangerment findings under Section 111(b) into this rulemaking.

Comment 3: Commenters stated agreement with EPA that Section 111 does not require that 

EPA issue a formal endangerment finding, and that even if Section 111 did require such a 

finding, EPA's rational basis would qualify as one. Commenters also agreed that parallel EPA 

rulemakings under Section 111(b) properly address and resolve the endangerment question: 

specifically, the discussions of endangerment from carbon emissions put forth in EPAs 111(b) 

regulation of new or modified power plants.(79 Fed. Reg. 1429, Jan. 8, 2014)

Response 3: EPA agrees that Section 111 does not require that EPA issue a formal 

endangerment finding. However, issues related to EPA’s obligation to make an endangerment 
41

finding under Section 111(b) are addressed in the preamble and otherwise in the record for 

EPA’s 111(b) rule.

Comment 4: Commenters stated the increasing evidence of the sensitivity of climate to rising 

levels of greenhouse gases such as Super Storm Sandy and more rapid disappearance of arctic 

sea ice underscores the need for states to take action to reduce greenhouse gas emissions. 

Commenters stated the Clean Air Act offers an avenue for addressing these greenhouse gas 

emissions and carbon pollution. Commenters stated once EPA finds that greenhouse gases are 

responsible for air pollution, must issue guidance to the states on how to implement the best 

system of emission reductions for existing sources. Commenters stated the Clean Air Act 

requires states to develop plans similar to the State Implementation Plans for Criteria Pollutants 

for Existing Sources of Non-criteria Pollutants, in this case, greenhouse gases. Commenters

stated that the regulations that you are considering now offer an opportunity to tailor a plan 

specific for Pennsylvania which would accomplish the emission reductions that are necessary to 

move forward to combat climate disruption.

Response 4: EPA addresses how climate change impacts support the need for greenhouse gas 

mitigation in the preamble of this rule and in RTC Section 8.7.1. Details regarding how state 

plans will support these emissions reductions are included in the preamble of this rule.

Comment 5: Commenters concluded that the EPA and all of the executive agencies share a 

fiduciary obligation under the Public Trust Doctrine to protect the atmosphere from the effects of 

human-induced global energy imbalance. Commenters stated the EPA may not manage the trust 

resource in a way that substantially impairs the atmosphere, the climate system, the oceans or 

water supply, or the public interest in a healthy atmosphere. Commenters stated if the EPA and 

the federal government, as trustees of the atmosphere, do not take immediate effective action to 

protect, preserve, and restore the atmosphere back into balance, our children, future generations, 

and innumerable species will continue to suffer greater injury and damaging consequences. The 

commenters cited several supporting documents (See James Hansen, et al., Assessing 'Dangerous 

Climate Change': Required Reduction of Carbon Emissions to Protect Young People, Future 

Generations and Nature, PLOS ONE 8:12, e81628, 2013; Amicus Brief on Behalf of Scientists 

in Support of Youth Appellants, Alec L. v. McCarthy, No. 13-5192 (D.C. Cir. 2013); Expert 

Declarations in Support of Youth Plaintiffs, Alec L. v. Jackson, No. 1:11-cv-02235 (D.D.C. 

2011and U.S. Global Change Research Program, Global Climate Change Impacts in the United 

States (2009)) Commenters concluded that significantly, fundamental constitutional rights of 

young people will be irreparably violated.

Response 5: EPA has concluded that in this rule it is protecting the health and welfare of both 

present and future generations.
42

Comment 6: Commenters stated that because CO2 emissions have not been demonstrated to 

directly cause adverse public health effects, EPA is forced to determine that CO2 may cause or 

contribute to endangerment of public welfare, but that adverse effects on public health have not 

been demonstrated. Commenters added that this finding would allow the states to exercise 

maximum flexibility in developing suitable plans under 40 CFR 60.24(d) which provides that 

States may balance the emission guidelines, compliance times, and other information provided in 

the applicable guideline document against other factors of public concern in establishing 

emission standards, compliance schedules, and variances. 

Response 6: First, to clarify what EPA did state in the record regarding GHGs and 

endangerment to public health in the 2009 Endangerment Finding under Section 202 of the Clean 

Air Act, EPA stated the following: 

“After review of public comments, the Administrator continues to believe that climate change 

can increase the risk of morbidity and mortality and that these public health impacts can and 

should be considered when determining endangerment to public health under CAA section 

202(a). As described in Section IV.B.1 of these Findings, the Administrator is not limited to only 

considering whether there are any direct health effects such as respiratory or toxic effects 

associated with exposure to greenhouse gases.

In making this public health finding, the Administrator considered direct temperature effects, air 

quality effects, the potential for changes in vector-borne diseases, and the potential for changes 

in the severity and frequency of extreme weather events. In addition, the Administrator 

considered whether and how susceptible populations may be particularly at risk.” (74 FR 66524).

The EPA continues to rely on the best available science in order to make its determinations. The 

EPA relies on major assessment reports, including the US Global Change Research Program’s 

National Climate Assessments (NCA), which consider the entire literature in context rather than 

selecting a small number of individual studies. The third and most recent NCA (2014) states that: 

Climate change threatens human health and well-being in many ways, including impacts 

from increased extreme weather events, wildfire, decreased air quality, and illnesses 

transmitted by food, water, and diseases carriers such as mosquitoes and ticks. Some of 

these health impacts are already underway in the United States.

Therefore, EPA has considered these comments, and finds that they do not provide credible 

evidence of flaws in the EPA’s approach of relying upon the best estimates of the major 

assessments, nor do they demonstrate that climate change does not represent a threat to human 

health.

Comment 7: Commenters stated in recognizing the flexibility available to the states, EPA made 

a clear distinction between pollutants which pose a direct threat to human health as opposed to 

those that pose a threat to human welfare, but for which adverse public health effects have not 
43

been demonstrated. Commenters explained that much greater latitude is provided to the states 

when a pollutant has not been demonstrated to have adverse public health effects, since the 

provisions of 40 CFR 60.24(d) apply, which provides that States may balance the emissions 

guidelines, compliance times, and other information provided in the applicable guideline 

document against other factors of public concern in establishing emission standards, compliance 

schedules, and variances. Commenters asserted thus it is mandatory that EPA make such finding 

clear in the guideline documents, and this finding would allow the states to exercise maximum 

flexibility in developing suitable plans.

Response 7: In 2009, the Administrator found that elevated concentrations of greenhouse gases 

are reasonably anticipated to endanger both public health and public welfare. As discussed in the 

preamble, there are many health impacts resulting from a changing climate, and new assessments 

released since the 2009 Endangerment Finding further confirm and support the 2009 finding of 

endangerment of both public health and welfare. Mass. v. EPA was clear that the consideration 

of endangerment must be based on “whether greenhouse gases contribute to climate change”, 

without taking into account policy considerations. Therefore, the EPA will not alter the finding 

of endangerment for both public health and public welfare.

Comment 8: Commenters stated that while EPA argues in the preamble to the proposal that only 

CO2 emissions from fossil-fueled power plants endanger public health and welfare, the 2009 

endangerment finding did not specifically determine this. The commenters cited the first 

sentence of the 2009 endangerment finding, that with respect to mobile sources, "six greenhouse 

gases taken in combination endanger both the public health and the public welfare of current and 

future generations." Further, the commenters remarked, the endangerment finding repeats several 

times that "six well-mixed greenhouse gases" pose health and welfare risks, and even in the 

proposed rule, EPA reviews the endangerment to health and welfare caused by greenhouse gases 

generally, not CO2 in particular. Commenters argued that the 2009 mobile source endangerment 

finding did not determine that each of the six identified greenhouse gases individually threaten 

health and welfare, but rather that EPA's use of the term "well-mixed" was deliberate and 

consistent throughout the finding, and that EPA may not simply ignore the specific elements of 

its endangerment finding today because it finds them inconvenient.

Response 8: The 2009 Endangerment Finding defined the air pollution which endangers public 

health and public welfare as the mix of six long-lived and directly-emitted greenhouse gases, 

also referred to as well-mixed greenhouse gases. CO2, as one component of the mix of six longlived greenhouse gases, is therefore an air pollutant in and of itself. It is not necessary for a 

single regulation to mitigate all six well-mixed greenhouse gases simultaneously in order to 

address the air pollution. There is longstanding precedent for defining an air pollutant broadly, 

even if a particular source category may not emit every substance covered by that air pollutant, 

or if a particular regulation may not regulate every substance (74 Fed. Reg. at 66,541, discussing 

heavy duty truck standards applicable to VOCs and PM, and noting “it is highly unlikely that 

heavy duty trucks emit every substance that is included in the group defined as VOC or PM”). In 
44

fact, the 2009 Endangerment Finding encompassed all six gases, despite the fact that motor 

vehicles do not emit PFCs or SF6. 

Additionally, the commenters have a misunderstanding regarding the term “well-mixed”. “Wellmixed” is a reference to a physical property of each individual gas, not a statement about the 

gases being mixed with each other. As stated in the 2009 Finding (74 Fed. Reg. at 66,517), 

“‘Long-lived’ is used here to mean that the gas has a lifetime in the atmosphere sufficient to 

become globally well mixed throughout the entire atmosphere, which requires a minimum 

atmospheric lifetime of about one year.” 

Therefore, while the air pollution remains the mix of six long-lived greenhouse gases, the 

regulation can appropriately address any individual component of that mix. 

Comment 9: Commenters stated that CPP is arbitrary and capricious, constitutes an abuse of 

discretion, and is otherwise not in accordance with law. The commenters contended that the 30% 

goal or 'meaningful' criteria are not proper CAA criteria. Commenters added that a 30% or 

"meaningful" reduction may be too great or too little, but the public cannot be certain because 

EPA has not justified the reduction or provided analysis or information on what impact, if any, 

the Rule will have on EPA's stated purpose of limiting climate change. Commenters stated EPA 

cited the 2009 Endangerment Finding, and lists a variety of potential impacts from GHG 

emissions, but does not quantify the benefits or justify its 30% or "meaningful" target.

Response 9: First, the climate benefits of CPP have been estimated by applying the social cost of 

carbon (SCC) (see the Regulatory Impact Analysis for full details). The SCC is a metric that 

estimates the monetary value of impacts associated with marginal changes in CO2 emissions in a 

given year. It includes a wide range of anticipated climate impacts, such as net changes in 

agricultural productivity and human health, property damage from increased flood risk, and 

changes in energy system costs, such as reduced costs for heating and increased costs for air 

conditioning. It is typically used to assess the avoided damages as a result of regulatory actions 

(i.e., benefits of rulemakings that have an incremental impact on cumulative global CO2

emissions). Second, the commenters mischaracterize what is required under this section of the 

Act. Under Section 111d of the Act, state plans must establish standards of performance that 

reflect the degree of emission limitation achievable through the application of the “best system of 

emission reduction” (BSER) that, taking into account the cost of achieving such reduction and 

any non-air quality health and environmental impact and energy requirements, the Administrator 

determines has been adequately demonstrated.
45

1.8 BUILDING BLOCKS 2, 3, AND 4: INTRA-STATE AND INTER-STATE 

COMPLIANCE

Comment 1: Commenters stated EPA must establish a protocol for rigorous enforcement and 

compliance actions against states that refuse to comply with this unusually decentralized 

rulemaking, and EPA must anticipate quickly assuming enforcement power, much as it 

authorized to do under the Clean Water Act, where EPA determines that a state is refusing to 

enforce its state-level CWA rules. 

Response 1: As explained in section VIII of the preamble, the EPA is not finalizing the proposed 

portfolio approach or state commitment approach, and any comments on these proposed 

approaches to 111(d) state plan design are therefore moot. Instead, the EPA is finalizing an 

option to submit a “state measures” plan type, under which a mass CO2 emission goal may be 

partially or entirely achieved through state measures that impose requirements on entities other 

than affected EGUs that are not included in the federally enforceable 111(d) state plan, provided 

the state submits standards of performance for CO2 emissions from affected EGUs in the form of 

a federally enforceable “backstop” that would be triggered if the state measures fail to achieve 

the required CO2 emission performance level. Under a state measures plan, the backstop 

emission standards constitute the standards of performance required by section 111(d), and the 

state plan provides for the implementation and enforcement of such standards of performance by 

specifying the trigger mechanism and conditions under which the backstop emission standards 

apply to affected EGUs. Upon EPA approval of a state measures plan under section 111(d), the 

backstop emission standards become federally enforceable requirements, which EPA and 

citizens may enforce against affected EGUs under section 113 and section 304 of the Act, 

respectively, once triggered and implemented to address a shortfall in necessary emission 

reductions. See section VIII. 

The final emission guidelines require that all 111(d) state plans, including state measures plans, 

specify CO2 emission monitoring, reporting and recordkeeping requirements for affected EGUs, 

demonstrate that plan measures are enforceable, and contain the process, content and schedule 

for state reporting to the EPA on plan implementation and progress toward meeting the required 

CO2 emission performance level. For state measures plans in particular, the final emission 

guidelines also require states to submit annual reports to the EPA that address periodic 

programmatic milestones to show progress in program implementation. See section VIII. The 

EPA intends to review each submitted state plan on a case-by-case basis to determine whether it 

satisfactorily addresses the Act’s enforceability requirements. Final EPA action on any 

submitted 111(d) state plan, including a state measures plan, is subject to judicial review under 

section 307(b) of the Act.

Comment 2: Commenters stated there are questions as to who has the legal authority to 

administer programs across the state and whether a legislative act would be required to allow 
46

specific authority that would need to be resolved before state compliance plans are finalized that 

ultimately could delay the process. Commenters cited Gifford, Sopkin, and Larson, which 

released a white paper that highlights these issues for several states who face similar legal 

complications as Georgia. (Gifford, Raymond, Gregory Sopking, and Matthew Larson. State 

Implementation of CO2 Rules: Institutional and Practical Issues with State and Multi-State 

Implementation and Enforcement. White Paper 2.0. November 2014) Commenters stated that its 

public service Commission regulates Georgia Power in this area. However, according to the 

commenters, the Commission, by state law, does not have authority over the 49 participants in 

the Municipal Electric Authority of Georgia (MEAG Power) or the various Electric Membership 

Corporations (EMCs). Commenters stated it is unclear who has the authority to run EE/DSM 

programs and authority to access the specific data needed to properly run an EM&V program for 

MEAG Power and the EMCs. Commenters stated MEAG Power and the EMCs provide roughly 

a third of the total retail energy sales for the state making the resolution of this issue critical. 

Response 2: We are not finalizing our proposed determination of BSER with respect to energy 

efficiency programs (building block 4). The state can therefore comply with the emission 

guidelines without relying on building block 4. In addition, as detailed in section V.A.6 of the 

preamble, there are non-BSER measures that can be used to reduce CO2 emissions from affected 

EGUs. Thus, the specific concerns of the commenter with respect to authority over energy 

efficiency programs are largely moot. With respect to the general concerns of the commenters, 

as explained in Section VIII of the preamble, EPA’s recognition that certain states may need 

time to make changes to state law depending on how they decide to structure their state plans 

was among the reasons for providing states with the ability to obtain an extension beyond 

September 6, 2016. Given the extension, the overall three-year deadline for final submittals is 

consistent with the three-year deadline for SIP submittals under section 110(a), and reasonable 

by comparison with similar or shorter deadlines for submittal of attainment plans.

Comment 3: Commenters stated that opponents have criticized the Clean Power Plan by arguing 

that EPA's statewide emissions limits, which include interstate trading as a potential compliance 

option, are unprecedented and unsupported under the Clean Air Act because section 111(d) 

directs the administrator to "establish standards of performance for any existing source for any 

air pollutant."(42 U.S.C. 411(d)(1)(A) (emphasis added)) but, in reality, EPA, under both 

Republican and Democratic administrations stretching back decades, has repeatedly instituted 

statewide emissions limits and trading programs to address air pollution, where the statute refers 

to controlling emissions from individual sources. Commenters added that the Clean Power Plan 

is not the first section 111(d) program that EPA has designed to include statewide limits and 

encourage interstate trading. Commenters stated under President George W. Bush, EPA enacted 

the Clean Air Mercury Rule ("CAMR"), which set state-level targets for mercury emissions from 

power plants and allowed for interstate trading.(Standards of Performance for New and Existing 

Stationary Sources: Electric Utility Steam Generating Units, Final Rule, 70 Fed. Reg. 28,606, 

28,606 (May 18, 2005). The DC Circuit vacated this rule in New Jersey v. EPA, 517 F.3d 574 

(D.C. Cir. 2008), on unrelated grounds. See Id. at 577-78, cert denied sub nom. Util. Air Reg. 
47

Grp. v. New Jersey, 555 U.S. 1169 (2009). Commenters stated the court held that EPA had failed 

to comply with the relevant delisting procedures under the hazardous air pollution section of the

Clean Air Act. Commenters stated the court did not reach the issue of EPA's decision to set 

statewide emissions limits and allow for trading under section 111(d).) Because of the 

cooperative federalism design of section 111, commenters stated EPA decided to set state-level 

emission targets and then allow states to opt-in to an interstate cap-and-trade system, instead of 

mandating participation.(70 Fed. Reg. at 28,621; see also State Plans for the Control of Certain 

Pollutants from Existing Facilities, 40 Fed. Reg. 53,340, 53,340-41 (Nov. 17, 1975) 

(implementing regulations for section 111(d), which describe the cooperative process for 

designing standards of performance for existing sources of a designated pollutant, whereby EPA 

first issues emissions guidelines "reflect[ing] the degree of control attainable with the application 

of the best systems of emission reduction" and states then develop plans containing emission 

standards that "must ordinarily be at least as stringent as the corresponding EPA guidelines")) 

Commenters stated that in conjunction with that rulemaking, EPA amended the section 111 

implementing regulations to provide that a state's "[e]mission standards shall either be based on 

an allowance system or prescribe allowable rates of emissions except when it is clearly 

impracticable."(70 Fed. Reg. at 28,649) Commenters stated this language providing that states 

may meet their compliance requirements through either a tradable allowance system or a 

prescribed emissions rate has remained in place since 2005.(See 40 C.F.R. section 60.24(b)(1)) 

Commenters stated that in proposing and enacting CAMR, the Bush Administration EPA 

extolled the virtues of an interstate trading regime and explained why state-level budgets and 

emissions trading are justified under section 111. Commenters said that for example, EPA 

explained: "The term 'standard of performance' is not explicitly defined to include or exclude an 

emissions cap and allowance trading program. In the final rule, commenters stated EPA 

interprets the term 'standard of performance,' as applied to existing sources, to include a cap-andtrade program. Commenters stated this interpretation is supported by a careful reading of the 

section 111(a) definition of the term."(See 70 Fed. Reg. at 28,616) "Nor do any other provisions 

of section 111(d) indicate that the term "standard of performance" may not be defined to include 

a cap-and-trade program."(Id. at 28,617) "EPA has determined that a cap-and-trade program 

based on control technology available in the relevant timeframe is the best system for reducing 

Hg emissions from existing coal-fired Utility Units."(Id) "The EPA below also outlines a method 

for apportioning the nationwide budget to individual States . . . . The EPA maintains that the 

emission budget provides an efficient method for achieving necessary reductions in Hg 

emissions (as described in earlier sections of this preamble), while providing substantial 

flexibility in implementing the program."(Id. at 28,621). Commenters stated that interestingly, 

many of the same utilities and states that oppose the use of statewide limits and flexible 

compliance options in the Clean Power Plan voiced support for the very same features of 

CAMR. Commenters stated that in joint briefing on the court challenge to CAMR, a number of 

industry groups, including the Utility Air Regulatory Group and the Edison Electric Institute, as 

well as a number of coal-intensive states like Alabama and West Virginia, argued that a cap-andtrade program is unlawful under Sec. 111. Commenters stated EPA has offered compelling legal 

justifications for a mercury cap-and-trade program. . . . A mercury cap-and-trade program is also 

reasonable as a matter of public policy.(Joint Brief of Respondent-Intervenors at 26, New Jersey 
48

v. EPA, 517 F.3d 574 (D.C. Cir. 2008) (No. 05-1097)) Commenters also stated these parties 

further argued, "CAMR maximizes reductions in U.S. mercury deposition while providing EGUs 

flexibility to achieve those reductions in a cost effective manner."(Id.) Commenters stated that 

just like its Clean Power Plan, EPA's CAMR rulemaking set statewide emissions targets and 

allowed for-but did not mandate-interstate emissions trading as a compliance mechanism for 

power plants under section 111(d).(Note, though, that in CAMR, EPA explicitly included a capand-trade program within its interpretation of "standard of performance" as applied to existing 

sources. 70 Fed. Reg. at 28,616. In contrast, commenters stated EPA does not explicitly include a 

cap-and-trade program within its interpretation of "standard of performance" in the Clean Power 

Plan. However, in both cases, EPA indicated that it would allow the use of interstate trading as a 

compliance option, without mandating its use.) Commenters stated this approach was formulated 

under the leadership of George W. Bush and embraced wholeheartedly by a number of states and 

industry groups that now decry the ability of EPA to use section 111(d) to enable an interstate 

emissions trading plan. Commenters concluded, stating that these groups' earlier statements and 

EPA's consistent approach support the legality and sagacity of a state-level emissions trading 

approach for pollution from power plants under section 111(d). 

Commenters continued, citing the Clinton Administration EPA's effort to enforce the Good 

Neighbor Provision, the NOx SIP Call, set statewide budgets and featured an optional trading 

program. Commenters stated EPA "encourage[d] States to consider electric utility and large 

boiler controls under a cap-and-trade program as a cost-effective strategy." Commenters stated it 

created a model program, which states could opt into. Commenters stated EPA explained in the 

rule that a regional trading system would allow states to achieve the required emissions 

reductions at the least cost.(Id. at 57,400) Likewise, commenters stated, EPA under the George 

W. Bush Administration created statewide emissions reduction requirements and crafted an 

interstate trading mechanism in its Clean Air Interstate Rule ("CAIR"). Comenters stated similar 

to the 1998 NOx SIP Call, CAIR allowed states to opt into a model interstate emissions trading 

program.(Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air 

Interstate Rule); Revisions to Acid Rain Program; Revisions to the NOx SIP Call, 70 Fed. Reg) 

Commenters stated the agency explained, "If States choose to . . . participate in the cap-and-trade 

program, allowances could be freely traded, encouraging least-cost compliance over the entire 

region."(Id. at 25,231) Commenters added that building on the cost-effective trading approach in 

those two earlier efforts to implement the Good Neighbor Provision, in the Transport Rule, the 

Obama administration EPA set statewide emissions reduction levels and designed "air qualityassured trading programs" to "ensure that necessary reductions will occur within every covered 

state."(Federal Implementation Plans: Interstate Transport of Fine Particulate Matter and Ozone 

and Correction of SIP Approvals, 76 Fed. Reg. 48,208, 48,210 (Aug. 8, 2011).) Commenters 

said that EPA explained, "the trading component of the Transport Rule provides flexibility to the 

power sector and enables industry to comply with the emission reduction requirements in the 

most cost-effective manner . . . thus minimizing overall costs."(Id. at 48,347) Commenters

remarked that the Supreme Court recently upheld the Transport rule. Commenters stated the 

Court held, "EPA's cost-effective allocation of emission reductions among upwind States . . . is a 

permissible, workable, and equitable interpretation of the Good Neighbor Provision."(EPA v. 
49

EME Homer City Generation, LP, U.S., 134 S. Ct. 1584, 1610 (2014) Commenters closed, 

stating that the Supreme Court's affirmance of EPA's consistent, decades-long interpretation that 

the Good Neighbor provision, which refers to individual sources, can be used to set statewide 

emissions budgets supports EPA's similar interpretation of the related Section 111(d) in the 

Clean Power Plan. Commenters noted that in order to comply with the Best Available Retrofit 

Technology ("BART") standard required by Section 169A of the Clean Air Act, [42 U.S.C. 

section 7491] several Southwestern states and municipalities - New Mexico, Utah, Wyoming, 

Albuquerque city, and Bernalillo County - adopted a regional cap-and-trade program to address 

haze/visibility impairment from sulfur-dioxide emissions over the Colorado Plateau.(Final Rule, 

Approval and Promulgation of State Implementation Plans; Wyoming, 77 Fed. Reg. 

73,926,73,927 (Dec. 12, 2012); Final Rule, Approval, Disapproval and Promulgation of State 

Implementation Plans; Utah, 77 Fed. Reg. 74,355, 74,357 (Dec. 14, 2012); Final Rule, Approval 

and Promulgation of State Implementation Plans; New Mexico, 77 Fed. Reg. 70,693, 70,695 

(Nov. 27, 2012); Final Rule, Approval and Promulgation of State Implementation Plans; City of 

Albuquerque-Bernalillo County, 77 Fed. Reg. 71,119, 71,121 (Nov. 29, 2012)) Commenters 

stated EPA had indicated in its regulations on regional haze that states could use a cap-and-trade 

program to comply with BART standards, if the program would achieve "greater reasonable 

progress" toward improving regional haze than would source-specific standards.(40 C.F.R. 

section 51.309(d)(4)(i); WildEarth Guardians v. EPA, 770 F.3d 919, 925 (10th Cir. 2014)) 

Commenters continued, stating that when designing emission guidelines for large municipal 

waste combustors under section 111(d), EPA allowed states to include compliance options that 

allowed the combustors to average their emission rates and trade NOx emission credits between 

plants.(Standards of Performance for New Stationary Sources and Emission Guidelines for 

Existing Sources; Municipal Waste Combustors, 60 Fed. Reg. 65,387, 65,402 (Dec. 19, 1995). 

40 42 U.S.C. section 7521(a)(1)) Commenters stated that similarly, though vehicle standards 

under section 202 apply to "new motor vehicles or new motor vehicle engines," EPA applied a 

fleet-wide average, where manufacturers could receive credit for more efficient vehicles and 

bonus credit for zero-emissions vehicles, and some trading was allowed among 

manufacturers.(See 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions 

and Corporate Average Fuel Economy Standards, 77 Fed. Reg. 62,624, 62,627-28 (Oct. 15, 

2012)) Commenters closed, stating that EPA's repeated use of flexible compliance mechanisms 

when the statute refers to individual sources supports the propriety of its use of flexible 

compliance mechanisms in the Clean Power Plan.

Response 3: We appreciate these comments.

Comment 4: Commenters stated EPA lacks the requisite legal authority to mandate the degree 

of interstate cooperation and coordination that would be needed to ensure effective 

implementation of the Proposal. EPA notes that it will be more cost-effective for States to take a 

regional approach via a multi-state plan or coordination agreements, [See e.g., EPA TSD - Legal 

Memorandum p.90 (noting the cost to comply with Block 2 will likely be much more cost -
50

effective if undertaken on a regional basis as opposed to intrastate approach)] but EPA has no 

actual legal authority to require the admittedly more cost-effective approach by requiring multistate plans or coordination agreements by the States. 

Commenters contended that EPA cannot force states into a regional coalition. Commenters 

stated that EPA proposes alternative approaches based on regional considerations or allocations, 

but states their intent is not to require regional plans. [79 FR 64549] Commenters believed EPA 

is proposing a Section 111(d) proposal that necessitates a regional plan in order for states to 

achieve their goals, since many of the individual state goals are not achievable, and argues that 

EPA cannot force states into a regional coalition 

Response 4: We are not forcing states into regional coalitions or multi-state plans. Interstate 

trading, through multi-state plans, plans with trading linkages, or trading-ready plans, would (as 

commenters admit) likely be the most cost-effective plan approach. However, EPA is not 

requiring states to adopt these types of plans. If a state chooses based on its policy preferences

another approach, such as retirements in order to meet a mass goal, the state may do so. 

Thus, in the NOx SIP call, EPA provided for states to join an interstate cap-and-trade program, 

but did not require them to. States could choose other approaches so long as they met the NOx 

emission budgets. As a result, the NOx SIP call was consistent with federalism principles. See 

Michigan v. EPA, 213 F.3d 663, 686-87 (D.C. Cir. 2000). Although the NOx SIP call set caps 

based on a different cost-effectiveness methodology, the general principle is the same for these 

emission guidelines. 

Since we are not requiring states to enter into multi-state trading, the argument, stripped of its 

state plan veneer, amounts to an argument that it is unreasonable for EPA in determining BSER 

to assume that states will allow sources to trade with sources in other states. We disagree, for the 

reasons given in Section V.A of the preamble. 

1.9 POTENTIAL COMBINATIONS OF THE BUILDING BLOCKS AS COMPONENTS 

OF THE BSER

1.9.1 Proposed BSER - combination of all four building blocks as the BSER

Comment 1: Commenters stated, instead of proposing a definite and specific system of BSER 

for states to apply to a designated existing source, the EPA is proposing a vague list of items that 

states may utilize, at their discretion, which might conceivably lead to emission reductions. 

Commenters said the EPA's building blocks are not a proposed BSER sufficient to satisfy the 

EPA's duty to determine a system of means for obtaining emission reductions. Commenters 
51

stated the building blocks exceed the EPA's authority, propose overstated results and 

unachievable energy generation redispatches, and threaten the commenters' economic viability 

and their members.

Response 1: We disagree. For the reasons discussed in section V.A. and V.B. of the preamble 

and in the Legal Memorandum, our interpretation of the BSER is reasonable and within the 

scope of EPA’s authority in light of the statutory text, statutory context, statutory purpose, and 

legislative history.

Comment 2: Commenters stated that the "flexibility" the EPA touts in the draft rule is illusory, 

especially for small facilities. Commenters said that state goals are set assuming that each state 

implements a GHG reduction plan that includes all four building blocks that make up the BSER. 

Commenters said if a state fails to adopt all four building blocks, it likely cannot meet its target. 

Commenters said if the EPA issues a federal plan for a state, it will be legally unable to 

implement building blocks 2-4, and thus the standards of performance for most, if not all states, 

would be unachievable and thus contrary to the CAA if the EPA pursues federal plans.

Response 2: We disagree. For the reasons discussed in section V.A. and V.B. of the preamble 

and in the Legal Memorandum, our interpretation of the BSER is reasonable and within the 

scope of EPA’s authority in light of the statutory text, statutory context, statutory purpose, and 

legislative history.

Moreover, as we explain in sections V.A. and V.B. of the preamble, our emission guidelines 

simply reflect an achievable emissions limit through the application of the BSER and do not in 

themselves require states or sources to implement the BSER. That is, EPA is responsible for 

determining the level of emission limitation from the source category, while states have the 

responsibility of assigning emission requirements to their sources that will ensure their 

achievement of that level of emission limitation. States may fulfil their responsibility by 

establishing emission standards or creating plans consistent with the guidelines. In doing so, 

states will be able to choose from a wide range of emission reduction measures, including 

measures that are not part of the BSER.

Comment 3: Commenters stated that if the EPA should move to finalize the proposed section 

111(d) guidelines, a more narrowly defined BSER is required to mitigate the pitfalls of the 

proposal. Commenters said EPA contends that its preferred BSER option is the best system 

because all four building blocks, taken together, get a greater emission reduction at a lower cost 

than the alternate BSER. Commenters said the EPA repeatedly acknowledges that individually, 

each building block on its own merits can be deemed a "system of emission reduction" consistent 

with the premise of achieving technically feasible emissions reductions at a reasonable cost and 

being adequately demonstrated. Commenters said options exist for the EPA to narrow the 
52

proposal to more precisely align with the requirements of the statute and address potential 

unintended consequences of implementing the rule as proposed.

Response 3: As we explain in section V. B. of the preamble and in the Legal Memorandum, we 

have refined our analysis of the BSER.

Comment 4: Commenters stated that EPA cannot rely on facilities that received funding under 

the Energy Policy Act of 2005. 

Commenters stated, that EPA cannot rely on facilities that received funding under the EPAct of 

2005. Commenters said, EPA mentions in the proposal that "one or more facilities involved in 

programs mentioned or relied on in this proposal may have received some form of assistance 

under the EPAct of 2005" and explains its interpretation of the word "solely." ESPS Proposal at 

34,856, n.92. 

Commenters stated, EPA's BSER analysis is also unlawful to the extent that it relies on projects 

that have received funding under the EPAct of 2005. Commenters said, given the EPAct of 

2005's focus on experimental technologies, it is not surprising that Congress recognized the 

program's inconsistency with the legal standards for establishing NSPS and prohibited the use of 

such programs to establish that a technology is adequately demonstrated: No technology, or level 

of emission reduction, solely by reason of the use of the technology, or the achievement of the 

emission reduction, by 1 or more facilities receiving assistance under this Act, shall be 

considered to be adequately demonstrated for purposes of Section 111 of [the Clean Air Act]. 42 

U.S.C. section 15962(i). Commenters said, section 1307 of the EPAct, outlining the treatment of 

tax credits for qualifying advanced coal projects, includes a nearly verbatim prohibition on the 

EPA Administrator's consideration of CCPI-funded projects under Section 111 of the Clean Air 

Act. 26 U.S.C. section 48A(g). Commenters said, the Associations have previously commented 

on EPA's purported justification for relying on facilities that had received EPAct of 2005 funding 

and incorporate those comments by reference. 

Commenters stated, the EPAct of 2005 prohibits EPA from considering evidence from projects 

funded under that act in setting "standard[s] of performance" under Section 111 of the CAA if, in 

the absence of such projects, EPA cannot establish that the NSPS control technology is 

"adequately demonstrated." Commenters said, in other words, EPA is required by statute to 

conduct a "but for" analysis to determine whether the control technology would qualify as BSER 

but for evidence from projects funded under the EPAct of 2005. Commenters said, if not, EPA 

cannot rely on the control technology in establishing a standard of performance. Commenters 

said, otherwise EPA could avoid the statutory limitations imposed by Congress simply by 

referring generally to other non-EPAct of 2005-funded projects, even if those other projects 

would be insufficient to establish that a given control technology qualified as BSER. 

Commenters said, such an interpretation would frustrate Congress' purpose in passing the EPAct 

of 2005 and would contradict the plain language of the statute.
53

Commenters stated, therefore, when a proposed or final NSPS must rely on evidence from 

projects funded by the EPAct of 2005 to be justified, such projects necessarily constitute the "but 

for" basis for the standard and are effectively the sole support for the control technology. 

Commenters said, here, in the proposed rule, EPA proposes to do exactly what the EPAct of 

2005 prohibits: it states that it is relying on projects that were funded under the EPAct of 2005, 

but fails to identify which projects received such funding or conduct the necessary "but for" 

analysis to determine if they are the sole support for the technology EPA relies on to establish 

BSER.

Commenters stated, EPA claims that it is free to consider EPAct of 2005-funded projects so long 

as it "does not depend solely upon those projects, and the [adequately demonstrated] 

determination remains adequately supported without any information from" EPAct of 2005 

projects." See 79 Fed. Reg. at 34,856 (citing EPA, NODA, 79 Fed. Reg. 10,750 (Feb. 26, 2014). 

Commenters said, EPA's expansive interpretation of the word "solely" creates a loophole so large 

that it essentially swallows the rule. Commenters said, EPA asserted in association with the 

January 2014 proposal that, while it cannot rely exclusively on EPAct of 2005-funded projects, 

the projects can "provide part of the basis for" an adequately demonstrated determination.

Commenters stated, in other words, according to the EPA, as long as the Agency can point to 

some other shred of supporting evidence, it is permitted to rely on EPAct of 2005-funded 

projects to show that a control technology is adequately demonstrated under Section 111. 

Commenters said, this contorted interpretation of the EPAct of 2005 is clearly contrary to the 

statute and to Congressional intent as described above, and places virtually no limit on the EPA's 

ability to rely on EPAct of 2005-funded projects. Commenters said, indeed, that is the case here. 

Commenters said, rather than explaining the role that EPAct of 2005-funded projects played in 

EPA's BSER analysis, EPA simply states in passing in a footnote that some EPAct of 2005 

projects may have been considered. Commenters said, given Congress' clear mandate here, EPA 

cannot make broad statements about the quality of its BSER analysis without providing 

interested stakeholders the necessary tools, such as the identities of EPAct of 2005-funded 

projects, to verify its assertions. Commenters said, EPA has failed to do so here, and the 

proposal, if finalized would be unlawful under the EPAct of 2005.

Commenters said that Vogtle 3 and 4 has received or will receive assistance provided through 

that legislation; therefore the units should not be demeaned "adequately demonstrated." 

Commenters said, See Congressional Research Service Report, Nuclear Energy Policy, at p. i 

(Sept. 19, 2013) ("Significant incentives for new commercial reactors were included in the 

Energy Policy Act of 2005 (EPACT05, P.L. 109-58), such as tax credits and loan guarantees.").

Response 4: EPA’s interpretation of the EPAct05 provisions is set out in Memorandum 

“EPAct05” (July, 2015) found in the docket for the section 111 (b) New Source performance 

Standard, as well as in responses to comment in chapter 2 of the Response to Comment 

Document for that rule (EPAct response unit). In short, the agency reasonably has concluded 

that each of the three provisions prevents the EPA, in determining the BSER, from finding that a 

technology or emission limit is adequately demonstrated based exclusively on evidence from 
54

facilities supported under EPAct05. However, the EPA interprets all three provisions to allow the 

EPA to consider and rely upon information from EPAct05-supported facilities in combination 

with information from other facilities. The EPA also rejects commenters’ suggestion that the 

EPA’s reading of the word “solely” would allow the EPA to avoid a limitation on its 

consideration of EPAct05-assisted facilities by including a mere scintilla of evidence from nonEPAct05 facilities. That situation is not presented here, where the principal evidence that the 

BSER is demonstrated and feasible comes from sources which received no assistance of any type 

under EPAct05. See Marine Shale Processors v. EPA, 81 F. 3d 1371, 1383 (5th Cir. 1996) (“We 

make no comment on this argument; this is simply not a thimbleful case”). Indeed, Building 

Blocks 1, 2 and 3 are based on the performance of mature technologies that have been 

demonstrated many times over at facilities not receiving EPAct assistance, and commenters have 

identified no units received such funding other than nuckes. So, at best, the commenters’ 

apparent (and implausible) position is that if there is a scintilla of evidence that one facility 

received EPAct05 assistance, then it is barred from considering performance of any non-EPAct 

facility! With regard to comments respecting nuclear facilities Vogtle 3 and 4, nuclear facilities 

are not included within the BSER determination for the final guidelines so these comments have 

become moot.

Comment 5: Commenters said that the proposed rule building block approach used to develop 

the states' plan could potentially miss opportunities for those methods to work together 

synergistically. Commenters said that, the Proposed Rule could unnecessarily increasing 

emissions and risk grid reliability due lack of planning for integration and reliability needs. 

Commenters said that the building block methods without sufficient attention to integration and 

reliability needs could result in (i) EGUs having to be operated to support reliability in a way that 

overwhelms the emissions reduction impacts of technical HRIs in building block 1and (ii) 

reliability-induced curtailment of clean energy resources could reducing their expected emissions 

impacts and increasing their effective cost in building block 3. Commenters said EPA could 

avoid unnecessary and undesirable outcomes in the proposed rule, if a consideration of grid 

integration and reliability are a part of BSER.

Response 5: These issues were taken into account in determining the final BSER.

Comment 6: Inclusion of building block 3 and building block 4 in BSER is beyond EPA’s 

authority.

Commenters stated USEPA admits that each of blocks 1 and 2 on their own could result in

significant CO2 emission reductions at reasonable costs yet cites the benefit of reducing reliance 

on fossil fuels and improving fuel diversity by using block 3. Commenters said USEPA also 

states that block 4 would improve the power system's reliability by reducing pressure on the grid 

due to reducing the amount of electricity being transmitted. Commenters said USEPA is not 

tasked with deciding which fuels are to be used in this country, nor in what proportion different 

fuels are to be used. Commenters said USEPA does not have expertise in transmission or grid. 
55

Commenters said USEPA wants to move away from certain types of generation and encourage 

the development of other measures, namely blocks 3 and 4. Commenters said it is the Agency’s 

task to provide emission guidelines for existing EGUs that inform the states on developing their 

standards of performance.

Response 6: As we explain in sections V.A. and V.B. of the preamble, our emission guidelines 

simply reflect an achievable emissions limit through the application of the BSER and do not in 

themselves require states or sources to implement the BSER. That is, EPA is responsible for 

determining the level of emission limitation from the source category, while states have the 

responsibility of assigning emission requirements to their sources that will ensure their 

achievement of that level of emission limitation. States may fulfil their responsibility by 

establishing emission standards or creating plans consistent with the guidelines. In doing so, 

states will be able to choose from a wide range of emission reduction measures, including 

measures that are not part of the BSER.

Comment 7: The following commenters agree with the proposed combination of the four 

building blocks as the BSER.

Commenters said states have already adopted several policies to reduce the electricity sector's 

climate impact, some focusing on reducing power plants' CO2 emissions, others addressing this 

outcome in a more roundabout fashion by encouraging EE and RE. However, commenters were 

unclear which, if any, of these direct and indirect strategies actually mitigate plants' emissions 

because scholars have yet to test their effects using plant-level emission data. Commenters said 

using a newly released data source to determine whether states' policies significantly shape 

individual power plants' CO2 emissions, they found that certain types of direct strategy 

(emission caps and GHG targets) and indirect ones (public benefit funds and electric decoupling) 

lower plants' emissions and are viable building blocks of a federal climate regime.

Commenters stated that this co-proposed definition of BSER is a permissible interpretation of the 

Act, agreed with the proposed building blocks and the alternative approaches described by EPA 

with emission trading systems or emission allowance systems.

Commenters supported use of all four building blocks, as this permits compliance efforts both 

inside and outside the EGU and gives states maximum flexibility to meet their goals.

Commenters wanted EPA to adopt the strongest possible regulations that will reduce further 

increases in GHG the most and the fastest. Commenters agreed with BB1 for most reduction and 

BB2 for faster reduction. Commenters said natural gas is not the long term solution, and agreed 

that the BSER should include building blocks 3 and 4. Commenters said the projected electricity 

price increase from this plan of less than 7% is quite affordable. 
56

Commenters stated the combination of all four building blocks best represents the BSER because 

it achieves greater emissions reductions at a lower cost, takes advantage of the wide range of 

measures that states, cities, towns and utilities are already using to reduce carbon emissions from 

EGUs and recognizes the integrated nature of the electricity system and the diversity of 

electricity generating technologies. Commenters said utilizing a strategy limited to combining 

only building blocks 1 and 2 would fail to take advantage of the significant carbon emissions 

reduction that could be achieved by deploying renewable energy technologies. 

Commenters also supported the EPA's broad interpretation for state standards of performance to 

apply a "standard for emissions" to "any existing source" in the listed category. Commenters said 

while the EPA must seek out the system that best serves the goals of CAA section 111, there are 

many available options for reducing carbon emissions from existing power plants through 

upgrades at these facilities. Commenters recommended that the EPA work with state, local and 

tribal governments to explore and promote local approaches to spur renewable energy sources 

that in turn also promote local solutions.

Commenters supported EPA's proposal that states may also demonstrate compliance through 

addition to non-BSER measures. 

Commenters said reliance on these building blocks 2, 3, and 4 - including the use of PC projects 

- is consistent with the CAA, with long-standing interpretation of the CAA by the courts, and 

with widely-employed and adequately demonstrated energy practices. Commenters said the 

NOPR relies only on those approaches to emission reduction from electricity production that are 

well demonstrated. Commenters said Performance Contracting (PC) projects are employed in 

every state in the nation. Commenters said though not explicitly discussed in the NOPR, the 

abundant experience with implemented PC projects means they are also adequately 

demonstrated. Commenters said the term "system" in "best system of emission reduction" should 

not be assumed to have been a casual or unintentional choice by Congress when it drafted sec. 

111. Commenters said Congress could have used other terms including "device", "equipment" or 

"technology" if it intended to constrict EPA's authority under section 111(d) only to requiring 

pollution controls that could be physically attached to, or exclusively used within, an emissions 

source. Commenters said the term "system" indicates a broader approach to emission control 

strategies permitted by this section of law, consistent with past court rulings relevant to EPA's 

current proposal. 

Commenters stated the District of Columbia urges EPA to maintain its BSER approach and 

ensure that the state emission guidelines will maximize air quality protection and reductions in 

carbon emissions. 

Commenters noted that the system reflects the reality of the electric grid, where interconnected 

energy generation resources are managed dynamically to ensure energy demand is met.
57

Commenters agreed that the BSER encompasses many of the least cost measures that can reduce 

CO2 emissions; in Oregon, these measures have worked well, and RE and EE improvements 

have been the most significant methods, resulting in emissions reductions, economic 

development and reduced electric rates.

Response 7: We appreciate these comments, as explained in Section V of the preamble we are 

not adopting the alternative BSER.

Comment 8: In comments submitted prior to the proposal in April 2014, and resubmitted 

following proposal, commenters offered the following as part of their answer to the question, 

"How should EPA set the performance standard for state plans," in EPA's "Considerations in the 

Design of a Program to Reduce Carbon Pollution from Existing Power Plants."

Commenters stated that CAA section 111(d) does not direct EPA to set the performance standard 

for state plans; rather, it directs EPA to establish procedures similar to those for state 

implementation plans under section 110. Commenters stated that under section 111(d) and 40 

C.F.R. Part 60 Subpart B, EPA is authorized to establish emission guidelines that provide 

information for the development of state plans. Commenters stated with this direction, EPA 

would establish guidelines that describe the following:

• various systems of emission reduction that have been adequately demonstrated at existing 

EGUs;

• the degree of emission reduction that is achievable with each system, along with costs 

and environmental effects of applying each system to designated facilities (i.e., EGUs);

• time schedules expected to be necessary for design, installation, and startup of control 

systems;

• the application of the BSER, considering costs of such reduction, that has been 

adequately demonstrated for existing EGUs and the compliance times within which 

equivalent emissions standards can be achieved; and

• the specification of different emission guidelines or compliance times for different sizes, 

types, and classes of EGUs as control costs, physical limitations, location, or other factors 

warrant. 

Commenters stated that following the procedures, or emission guidelines, the states have the 

authority and responsibility to determine the BSER has been adequately demonstrated and is 

achievable for individual sources within the state and to establish the actual performance 

standards, taking into consideration, among other factors, the remaining useful life of each 

existing source.

Commenters agreed with EPA that "Given the broad range of factors that affect a utility's 

decisions regarding the make-up of its power plant fleet, it would not be reasonable for EPA to 

second-guess decisions regarding the remaining useful life of facilities." Commenters stated that 
58

the consideration of remaining useful life is assigned to the states under CAA section 

111(d)(1)(B). Commenters stated that utilities in their state have spent around $3 billion for the 

installation of controls for criteria pollutants and air toxics to comply with various regulatory 

requirements over the last few years and to be able to continue operation. Commenters stated that 

the state should be able to consider the age of each affected EGU within the state, the "sunk 

costs" for emissions controls already installed or planned for each EGU to meet other regulatory 

requirements, and the potentially stranded investments that would result from the permanent 

shutdown of an affected EGU. 

Commenters argued that the determination of the BSER must be source-based and not systembased. Commenters stated that standards of performance should be based on reductions in CO2 

emissions that can be reasonably achieved through actions at individual electric generating units,

such as on-site energy efficiency measures. Commenters stated that once the source performance 

standards are set, then the states should have flexibility in implementing the standards to help 

reduce compliance costs. For example, commenters suggested that states could allow sources 

credit for emission reductions from "beyond the fence line," including the procurement of RE 

generation (i.e., wind) and the implementation of programs such as demand-side management 

and end-use EE initiatives. 

Commenters stated that a new complication in their state in considering the BSER and 

establishing standards of performance for each source is the nearly universal movement of 

regional power pools (or RTOs) to next-day dispatch. Commenters stated that electric generation 

and transmission in their state is coordinated through the Southwest Power Pool (SPP), which 

just institutionalized next-day dispatch in 2014. Commenters stated that the effects of this change 

are not completely realized but likely will result in large base-load units (mostly coal-fired) being 

called upon more for generation and to operate at higher capacity. Commenters stated that due to 

the increased utilization of these units being the most economical, slightly higher CO2 emissions 

may result. 

Response 8: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

While we are not re-opening the 1975 regulations, in response to comments, we explain in the 

preamble why they give the EPA broad authority to determine the BSER and, based on that, 

statewide emission limitations for sources in the state.

Comment 9: The following commenters generally agree with the proposal, but suggest a few 

changes.

Commenters supported EPA for its outreach efforts and the approach put forth in the proposal, 

specifically, the "outside the fence" approach taken to determine BSER and the broad 

compliance options available to the states. Commenters said this approach is supported by the 
59

CAA and anticipated regulatory and market developments but believed some adjustments will be 

necessary before the rule is finalized.

Response 9: We appreciate this supportive comment and agree, as reflected in the final rule, 

that some adjustments were necessary.

Comment 10: Commenters stated that EPA should limit target setting to what can be achieved 

within the fence line, i.e. on the existing generating units targeted for reduced CO2 emission 

reductions. Commenters said of the four BSER Blocks that EPA proposed, only Block 1 

addresses measures that are implemented on the electricity generation unit. Commenters 

recommended that EPA retain the flexibility that EPA has refined with Blocks 3 and 4 by 

allowing credit toward meeting properly weighted Block 1 targets. Commenters said in 

Minnesota, Block 2 measures should already have received consideration through Integrated 

Resource Planning, and, similarly, early action in Minnesota should be more than sufficient for 

satisfying EPA's CPP proposal measures through 2030.

Response 10: We disagree. As explained in Section V of the preamble the Agency is basing 

BSER on BB 1-3. For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 11: The following commenters believe the BSER should just be Building blocks 1, 2 

and 3.

Commenters agreed the only ways to cost-effectively control carbon emissions from the affected 

EGUSs is to increase the efficiency of existing units; to encourage greater utilization of lower or 

no carbon emitting technologies; and to promote energy efficiency in the use of electricity. 

Commenters suggested that EPA base BSER on the first three building blocks, with revisions, as 

an approach more consistent with how the power system naturally works. Commenters said they 

understand and support efforts to increase demand side EE, but believe that this tool is better 

used as a compliance option through SIPS. Commenters said demand side EE is outside the 

"power system" and undermines the coherence of EPA's "system" based approach to BSER..

Response 11: We disagree. As explained in Section V of the preamble the Agency is basing 

BSER on BB 1-3. For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.
60

Comment 12: The following commenters agree with the proposal, but believe more focus 

should be on Building Block 3.

Commenters stated an effective and responsible carbon reduction plan would have as its 

overarching goal: the removal of the most carbon, at the least cost, in the shortest amount of 

time, and without creating additional environment or social problems. Commenters said the only 

BSER energy resources that meet this goal are EE and RE resources and recommended EPA 

give priority to use of these for maximum carbon reduction, and guide state compliance 

mechanisms towards an emphasis on the implementation of them.

Commenters stated use of RE and demand side EE should be incentivized and promoted. 

Commenters said there is a significant need to increase the use of RE to address the impacts of 

climate change and suggested including incentives that encourage states to deploy RE on a larger 

scale. Commenters said increased capacity and evolving technology allow RE to be used at 

lower cost and larger scale than contemplated in the proposed rule. Commenters said increased 

targets for RE use within each state would allow for even greater reductions in carbon emissions 

in a cost-effective manner that would also support innovation and create new jobs. Commenters 

recommended the development of comprehensive systems to improve EE at the individual level.

Response 12: See Chapter V.E. of the Preamble of a discussion of increased reductions from 

BB3. 

Comment 13: The following commenters support multi-state plans as a BSER option.

Commenters stated EPA can avoid some of the inefficiencies, unnecessary costs and reliability 

impacts from the Proposed Rule by allowing companies that generate electricity across multistate areas to demonstrate compliance in the various states that they operate using companybased multi-state plans. Commenters said this approach fits within the parameters of the 

Proposed Rule and will provide states and companies the flexibility to achieve CO2 emission 

reductions in the most cost-effective, technically sound manner. Commenters said they urge EPA 

to approve this portfolio management approach as BSER.

Commenters stated allowing companies to allocate zero and certain low carbon resources to 

show compliance with their obligations in states across their multi-state generation system can 

readily fit within the legal requirements set forth in the Proposed Rule. Commenters said while 

the details of how such an allocation scheme will work must be established during the state plan 

development process, the rule as currently proposed does not preclude companies from using 

such a method to meet their obligations consistent with the requirements of adopted state plans. 

Commenters asked that EPA clarify that, whether a given state adopts its own plan or 

participates in a state-based multi-state plan, companies must be allowed to allocate their zero 

and low carbon resources among the states where they operate and have obligations under the 

rule. 
61

Commenters said this better reflects the multi-state nature of the electrical grid, facilitates state 

plan development, avoids disruption to the grid, enables load growth without waste, and better 

fits with the interstate nature of the electrical power supply networks.

Response 13: While EPA agrees with many of the policy concerns expressed by the 

commenters, we disagree with some of the specific recommendations, which misunderstand the 

roles of EPA and the States under section 111(d). EPA can provide, and has provided in these 

emission guidelines, flexible approaches for States to adopt to minimize the costs of compliance 

and to address reliability concerns. In particular, the flexibilities provided by multi-state plans, 

plans with specified trading linkages, and trading-ready plans would allow companies with 

affected EGUs in multiple states to efficiently comply through interstate trading. Thus, these 

emission guidelines allow States to address the policy concerns expressed by the commenters. 

Ultimately, though, and as the commenters appear to recognize, a State can decide on its 

approach so long as the state plan meets the minimum requirements of these guidelines. Thus, 

EPA cannot dictate to States that they accommodate multi-state companies by allowing multistate trading, although EPA strongly encourages states to do so and agrees with the commenters 

that it may help minimize costs. If instead a state chooses to comply by, for example, retiring 

certain affected EGUs in order to meet a mass goal, the state may do so. And under section 116 

of the Act, states may impose more stringent emission limitations than are required under these 

emission guidelines. See 42 USC 7416. Thus EPA is not able to provide the sort of direct 

guarantee to multi-state companies that the commenters request.

Comment 14: The following commenters think that EPA did not consider the interconnected 

nature of the power system when deciding BSER. 

Commenters stated that EPA did not assess the effects each building block will have on the other 

building blocks or on the bulk power system when simultaneously undertaken at the levels EPA 

believes are achievable. Commenters continued that because the goals and compliance periods 

proposed do not reflect the reliability implications of the changes to the interconnected power 

system that will be required to implement the BSER building blocks, they do not fully depict the 

changes the system may have to implement, the costs that will be incurred or the time that these 

changes will take.

Commenters stated if reducing CO2 is the overarching goal of the CPP, utilities should be given 

a planning horizon that allows flexibility to utilize the lowest emitting baseload plants that are 

available. Commenters said new nuclear facilities take approximately 20 years to plan, permit, 

and construct. Commenters said the EPA's 2030 deadline eliminates the option of using new 

nuclear to significantly reduce a utility's carbon footprint; however, the CPP would require stateof-the-art coal plants to be shuttered and replaced with natural gas generation, which will only 

reduce CO2 emissions by approximately 50 percent and strand coal plant assets in Florida that 

are worth billions. Commenters said the portion of the goal that is derived from Building Block 
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1, which is based on heat rate improvements for coal plants, cannot be achieved if those plants 

are shut down as required by the CPP.

Commenters encouraged EPA to evaluate the building blocks collectively. Commenters provided 

that increases in NGCC dispatch, renewables and demand-side EE will cause more coal-fired 

EGUs to operate less, possibly resulting in more coal-fired EGUs operating as load-following 

units as opposed to base load units. Commenters said as EPA has indicated, load-following coal 

fired EGUs have less opportunity for heat rate improvements; therefore, the target established for 

the Building Block 1 component by EPA may not be achievable given the impacts of Building 

Blocks 2, 3 and 4.

Commenters stated that while they appreciate the need for state flexibility, the plan's building 

blocks are not equal in terms of environmental impact and climate change mitigation and should 

be weighted accordingly.

Commenters stated that the combination of building blocks must be considered as a whole and 

one part of the Proposal cannot be severed from other parts. Commenters stated that U.S. EPA is 

setting these goals based on what is achievable from a national perspective and not looking at 

individual state characteristics such as sufficiency of the natural gas pipeline or what HRIs have 

already occurred at specific units. Commenters stated that if any single building block is 

invalidated, the perceived "flexibility" being afforded to states under this approach becomes even 

more misleading and if any building block is invalidated, U.S. EPA should be required to review 

the proposal in its entirety to ensure whatever goals remain are still adequately demonstrated to 

be an achievable system of emission reductions.

Response 14: For the reasons discussed in Section V.A.7 EPA disagrees that the building blocks 

are not severable and that additional review would be needed. We also disagree that if a building 

block were invalidated state flexibility would decrease as the available reductions would remain 

as a compliance option. As described in the preamble and elsewhere in this RTC the factors 

noted above have been appropriately accounted for. Additionally, commenters’ concerns about 

load-following are address in section V.C of the final rule preamble of the CPP and Chapter 2 of 

the GHG Mitigation Measures TSD supporting the final CPP.

Comment 15: Commenters said EPA contradicted itself in the proposal when they said the 

building blocks are a combination of multiple measures working together, and then asserted that 

each block could stand alone if a court were to deem one unlawful. Commenters said EPA's 

BSER analysis shows that two of the building blocks are somewhat dependent on each other, and 

EPA has noted there could be a rebound effect if building block 1 were applied in isolation. 

Commenters stated HRIs at coal-fired EGUs could make those generating units more 

competitive, resulting in their greater use, absent other incentives to reduce generation and CO2 

emissions from coal-fired EGUs. Commenters noted that according to EPA, building block 2 (redispatch) provides the necessary incentive to reduce generation from coal-fired EGUs; therefore, 
63

building blocks 1 and 2 are interrelated. Commenters said a determination that building block 2 

is unlawful would require EPA to reconsider its BSER determination in its entirety, or at least 

the inclusion of building block 1 as a component of BSER. Commenters stated EPA makes no 

effort to demonstrate that building blocks 3 and 4 are interconnected with building blocks 1 and 

2, so as to make the combination of all four measures a system. Commenters said EPA suggests 

that the four building blocks are a system in light of the integrated nature of the electricity grid; 

however, commenters stated that it is the building blocks, not the regulated source category, that 

must be interconnected under EPA's proposed new definition of system. Commenters noted EPA 

repeatedly argues that the building blocks can be implemented independently of one another, 

which suggests they are not really a system at all. Commenters said a multiplicity of 

independent, free-standing elements cannot be a system of emission reduction under any 

reasonable interpretation of that term. Commenters summed that EPA's argument that its BSER 

components are severable is incompatible with its argument that its BSER components combine 

to form a system of emission reduction-either the building blocks "work[ ] together as parts of a 

mechanism or interconnecting network" or they are severable, but they cannot be both. 

Commenters continued if EPA finalizes its new approach to determining BSER, it must 

relinquish its argument that its BSER components are severable. Commenters said any finding 

that a building block is unlawful or invalid will require a reconsideration of the BSER 

determination as a whole.

Response 15: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Moreover, the severability of any one building block is not incompatible with defining a system 

of emission reduction as a set of measures that work together to reduce emissions. For example, 

in the integrated grid, merely because a power plant is taken out of service due to a malfunction 

does not mean that the whole electrical system fails. For the same reason, the severability of any 

one building block will not require a reconsideration of the BSER as a whole. We address 

severability in section VI of the preamble.

1.9.2 Alternate approach to the Best System of Emission Reduction

Comment 1: Commenters opposed basing BSER on building blocks 3 and 4, but supported 

credits for those measures. Commenters said utilities should then be allowed to voluntarily use 

what are currently building blocks 3 and 4 as an optional crediting mechanism. Commenters said 

this is consistent with the language and structure of CAA 111(d), as well as existing CAA 

precedent, and precedent set by leading state programs. 

Response 1: : For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 
64

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

Accordingly we have retained BB3 but excluded BB4 from our BSER. Energy efficiency 

remains an important compliance option.

Comment 2: EPA has Authority to Require Reduced Utilization as Part of BSER; EPA can 

include reduced utilization of affected sources as BSER.

Commenters supported EPA's interpretation that the BSER can include reduced utilization of 

affected sources under 111(d) of the CAA, and that the authority to limit the quantity of 

emissions logically carries with it the power to interpret the BSER as involving requirements to 

reduce the utilization of affected sources. The commenters' support is based on the following 

points:

a) That the proposed BSER determinations are in accordance with President Obama's instruction 

to EPA to "ensure, to the greatest extent possible, that [EPA] . . . develop approaches that allow 

the use of market-based instruments, performance standards, and other regulatory flexibilities; 

[and] ensure that the standards enable continued reliance on a range of energy sources and 

technologies."

b)That the recognition of the integrated nature of the electric grid is central to both BSER 

approaches, and whether Building Blocks 2, 3, and 4 are components of the BSER or not, the 

electric grid includes all generators and electricity consumers. EPA asserts that a BSER 

determination that recognizes the integrated nature of the electric system is consistent with the 

way in which the industry addresses resource planning issues. In regulated states, utilities 

generally develop integrated resource plans that set forth their strategies for meeting future 

demand for electricity services in a cost-effective manner. These plans may include measures 

from Building Blocks 2, 3, and 4. In non-regulated states, independent system operators ("ISOs") 

and regional transmission organizations ("RTOs") administer capacity auctions where owners of 

existing EGUs, developers of renewable capacity, and developers of demand-side resources all 

compete to provide potential resources for meeting projected electricity demand. 79 Fed. Reg. at 

34,881. 

c) That EPA's interpretation that the BSER can include the reduced utilization of affected sources

is a permissible interpretation of the Act, and the legislative history of the 1970 Clean Air Act 

Amendments "indicates that Congress recognized that emitting sources could comply with 

pollution control requirements by reducing production, including retiring." Id. at 34,889. In its 

proposed amendments, the Senate's Committee of Public Works stated that the protection of 

public health, as required by the national ambient air quality standards and the emission 

standards for hazardous air pollutants, would require major action throughout the country, 

whether in the form of technology controls or retirements: "[m]any facilities may require major 

investments in new technology and new processes. Some facilities may need altered operating 

procedures or a change of fuels. Some facilities may be closed." S. Rep. No. 91-1196 (1970). 
65

Commenters also noted that during its deliberations, the Senate Committee raised concerns with 

respect to basing the ambient air standards on the concept of technical feasibility, concluding, 

nevertheless, that existing sources should either meet the required standard or close down: "In 

the Committee discussions, considerable concern was expressed regarding the use of the concept 

of technical feasibility as the basis of ambient air standards. The Committee determined that 1) 

the health of people is more important than the question of whether the early achievement of 

ambient air quality standards protective of health is technically feasible; and, 2) the growth of 

pollution load in many areas, even with application of available technology, would still be 

deleterious to public health.” Therefore, the Committee determined that existing sources of 

pollutants either should meet the standard of the law or be closed down, and in addition that new 

sources should be controlled to the maximum extent possible to prevent atmospheric emissions." 

S. Rep. No. 91-1196, at 2-3 (1970). Commenters argued that this legislative history suggests that 

Congress intended for EPA to impose stringent standards under different Clean Air Act 

programs that, as a practical matter, could result in reduced utilization of the sources or entities 

regulated under those programs. Commenters added that Congress itself has established 

standards under the Act whose practical effect has been the reduced utilization, including the 

closure, of some of the regulated units and cited as an example Title IV's Acid Rain Program.

d) That interpreting the term "best system of emission reduction" under Section 111 as including 

measures to decrease emissions by reducing the utilization of affected sources is consistent with 

the Act's primary purpose of encouraging air pollution prevention by states (as well as the federal 

and local governments). Id. Sec. 7401(c). Commenters also argued that in its findings and 

declaration of the Act's purposes, Congress provided "that air pollution prevention (that is, the 

reduction or elimination, through any measures, of the amount of pollutants produced or created 

at the source) and air pollution control at its source is the primary responsibility of States and 

local governments." Id. Sect. 7401(a)(3). 

e) That although Section 111 and the Implementing Regulations do not define the terms 

"emission limitation" or "emission standards," Section 302(k) of the Act defines both terms as a 

requirement established by the states (in the case of emission standards) or by EPA "which limits 

the quantity, rate, or concentration of emissions of air pollutants on a continuous basis, including 

any requirement relating to the operation or maintenance of a source to assure continuous 

emission reduction?" 42 U.S.C. sec. 7602(k). Commenters argued that the authority to limit the 

quantity of emissions logically carries with it the power to interpret the BSER as involving 

requirements to reduce the utilization of affected sources. 

e) That in prior emission guidelines under Section 111(d) and Section 129 of the Act, EPA has 

determined that the BSER included measures implemented outside the source's boundaries that 

reduced their utilization and thus their emissions. Commenters discussed examples using EPA’s 

emission guidelines for existing hospital, medical, and infectious waste incinerators, which 

requires state plans to include waste management plan requirements that are "at least as 

protective" as the applicable requirements for new sources of the same type, and require the 

owner or operator of an affected facility to prepare a waste management plan for separating solid 

waste components from the health care waste stream in order to reduce the amount of toxic 
66

emissions from incinerated waste. 40 C.F.R. sec. 60.55c; Subpart DDDD, the emission 

guidelines for commercial and industrial solid waste incineration units, which requires affected 

sources to submit waste management plans that identify "both the feasibility and the methods 

used to reduce or separate certain components of solid waste from the waste stream in order to 

reduce or eliminate toxic emissions from incinerated waste." 40 C.F.R. sec. 60.2620; and similar 

requirements that apply to "other" solid waste incineration units under Subpart FFFF. 40 C.F.R. 

sec. 60.3012. Commenters noted that the waste management measures under all these regulations 

are intended by EPA to reduce emissions through the reduction of inputs and "can achieve 

significant reductions in their waste stream, reduce the volume of waste to be incinerated, and 

thereby reduce the amount of air pollution emissions associated with that waste." Thus, 

commenters argued that the agency has previously contemplated that certain measures that are 

not implemented directly at the affected source can be used to reduce inputs in the combustion 

process, and thus the utilization of these sources, without altering the technology by which those 

sources produce and control emissions of air pollutants. 

Commenters stated that EPA's regulation of hospital, medical, and infectious waste treatment has 

increased the costs of incineration and, as a practical matter, has caused the closure of 

incinerators in favor of alternative compliance options, with a decrease from over 2,000 units in 

the mid-1990s to 57 in 2008. Commenters also argued that outsourcing waste management to 

commercial waste treatment companies today is the most common compliance option for 

medical incinerators, and that the availability of waste management measures for compliance has 

also resulted in a decrease in the percentage of medical waste incinerated, increased use of 

alternative treatment methods, and thus the reduced the utilization of these units. 

Response 2: We appreciate these comments, which are supportive of this rule. We have refined 

the role that reduced generation plays in our determination of the BSER, as explained in the 

preamble.

Comment 3: Several commenters oppose EPA requiring reduced utilization of regulated sources 

as BSER stating that EPA’s alternative approach to BSER is unlawful, unreasonable and 

unprecedented.

Commenters argued that Section 111 is focused on technologically-achievable emission 

reductions from individual sources and reduced utilization is not a technology-based standard.

Commenters argued that since BSER is not statutorily defined, its meaning can be inferred from 

the CAA text which calls for emission reduction not production reduction, that it must take into 

account the costs of achieving the reduction which they interpret to mean that BSER carries with 

it production neutrality, and state that it must be applicable to an existing stationary source.

Commenters argued that CAA section 111 does not authorize EPA to use reduced utilization as a 

system of emission reduction. Commenters argued that CAA 111 contemplates that NSPS and 
67

ESPS shall be point-source-specific emission limitations, except for sources of fugitive or 

otherwise unmeasurable emissions. Commenters concluded that consistent with Congress' desire 

to promote economic growth, the NSPS program was intended to allow for the construction of 

new facilities so long as they adopted modern, adequately demonstrated and affordable control 

technology, and it was never intended to restrict facilities from operating. Commenters argued 

that EPA’s interpretation of Section 111 is unprecedented and undermines the original 

congressional intent to promote economic growth by setting specific source performance 

standards. Commenters asserted that BSER is, and has always been, about examining 

“adequately demonstrated” technology that can be installed at facilities in a cost-effective 

manner and it was not Congress’ intent to decrease production and restrict operation of otherwise 

viable energy sources.

Commenters argued that effectively forcing the early retirement of all coal-fired EGUs in several 

States (and a significant number of coal-fired EGUs elsewhere) fails to take into account the 

remaining useful life of these facilities. Commenters stated that the Administrator commanded 

that states be allowed to consider the remaining useful life of a source in developing a section 

111(d) plan. Commenters argued early retirements will result in significant stranded costs for 

facilities, particularly those that have recently incurred significant costs associated with 

complying with other federal rules such as MATS.

Commenters argued that forcing existing sources to shut down or compelling non-use of certain 

sources is not a “system of emission reduction” under Section 111(d), that such an interpretation 

would have no clear limiting principle, and this is contrary to the CAA requirements that any 

“best system of emission reduction” be “adequately demonstrated.” Further, commenters claimed 

that EPA has never proposed reduced utilization or operation of the source as a “system of 

reduction” under Section 111. Commenters further claimed that EPA has never considered 

capping a source’s operation as part of a system of emission reduction in any of its previous 

NSPS or emission guideline rulemakings. 

Response 3: In the proposal, the EPA identified reduced generation as an alternative BSER. The 

EPA is not taking that position in the final rule. Rather, the EPA is taking the position that 

substitution of cleaner generation is the BSER. While reduced generation may be a component of 

substitution that allows affected EGUs to meet their emission limits, it is not itself the BSER. 

Substitution allows sources to ensure the same level of product output (in this case, electricity) 

while reducing emissions from the regulated unit. Thus, the degree of reduced generation that 

can be justified after considering costs and other factors is limited to the amount of substitute 

generation available on the grid.

Comment 4: Commenters stated, a performance standard calibrated in lbs-CO2/MWh is 

intended to improve a designated facility's performance by reducing emissions per unit of output. 

Commenters asserted that the CCP's core strategy, however, is to reduce emissions by decreasing 
68

the output (electric generation) of coal power plants. Commenters asserted that decreasing 

output does not improve a source's performance and, thus, cannot qualify as BSER.

Response 4: We disagree with this comment. For the reasons discussed in the preamble, 

substituting higher emitting generation for lower emitting generation is a valid approach to the 

BSER. In addition, the performance standard for this rule may be calibrated either in lbsCO2/MWh or as a mass limit, and reductions in generation can reduce mass emissions. 

Comment 5: Congress has previously introduced curtailments and operation of clean units to 

replace curtailments

Commenters stated, at the same time that Congress established the current BSER standard, 

Congress designed the CAA Title IV trading system that would lead some EGUs to shut down or 

reduce utilization while shifting electricity generation to other cleaner facilities. Commenters 

provided examples from the 1990 Clean Air Act Amendments of curtailments used to control 

EGU emissions that cause acid rain, the receipt of allowances for "avoided emissions" by paying 

for renewable energy and energy efficiency measures, and the reactivation of inoperative "very 

clean units" through a streamlined permitting process presumably so that these low-emitting 

units could replace the curtailed generation of dirtier units. Commenters said Congress was not 

just aware that shifting generation from high-emitting to low-emitting resources was an available 

system for reducing power-sector emissions, but Congress took deliberate steps to enable this 

cost-effective system for protecting human health and the environment.

Response 5: We agree with the comment.

Comment 6: EPA, states, and the courts, have long understood that utilization is a key 

determinant of emissions levels, and that reduced utilization can achieve air quality goals

Commenters said, since the 1990's, regulators implementing the CAA have routinely relied on 

mechanisms such as "synthetic minor" permits and "plant-wide applicability limits" by which 

owners of sources may avoid certain permitting requirements if they agree to operate facilities so 

as to keep pollution levels below stated regulatory annual emissions thresholds, even though 

their facilities' physical capacity to emit exceeds the thresholds. Commenters said these 

mechanisms rest on the recognition that pollution is a function of a source's emissions rate and 

the time it is in use, and that limiting utilization can be an effective way of limiting pollution. 

The commenters said this demonstrates that, in certain instances at least, reductions in operation 

(or promises not to increase operations) are appropriate regulatory tools under the Clean Air Act. 

The commenters said, in 1979, the D.C. Circuit recognized that under the PSD program "EPA 

has authority to require inclusion in state plans of provision for the correction of any violation of 

allowable increments or maximum allowable concentrations, and may even require, in 

appropriate instances, the relatively severe correctives of a rollback in operations . . ." Alabama 
69

Power Co. v. Costle, 636 F.2d 323, 363 (D.C. Cir. 1979). The commenters said, Section 111's 

"best system of emission reduction" standard must encompass this basic mechanism for reducing 

emissions. 

Response 6: We agree with this comment.

Comment 7: Commenters stated, EPA has also correctly observed that "[r]eduction of, or 

limitation on, the amount of generation is already a well-established means of reducing 

emissions of pollutants in the electric sector." 79 Fed. Reg. at 34,889 (listing several emission 

control programs under which reduced generation is an available compliance option). The 

commenters said, reduced generation is already a prominent consideration in compliance 

planning for EGUs, and ICF's Integrated Planning Model's optimization process incorporates 

"reduce running regime" as one of the main compliance options for policies that set an emissions 

cap. 

Response 7: We agree with this comment.

Comment 8: Commenters asserted that Congress knew how to address intermittent control 

strategies such as shutting down or reducing utilization of regulated sources - and when it did, it 

explicitly rejected their use. Commenters cited as examples, in section 123 of the CAA, 

Congress provided that "dispersion techniques" - defined to include "intermittent . . . control of 

air pollutants varying with atmospheric conditions" - "shall not . . . affect[] in any manner" the 

"degree of emission limitation required for control of any air pollutant under an applicable 

implementation plan." Id. section 123(a), (b); and refer to CAA sections 402(a) and 404(a). 

Commenters claimed that Congress rejected control strategies that vary utilization based on 

atmospheric conditions in favor of strategies that reduce the rate of emissions and that the 

"standard of performance" language of section 111 is inconsistent with the concept of 

"intermittent control" strategies, and Congress's explicit rejection of these strategies in the 

context of implementation plans counsels against any reading of section 111(d) to authorize their 

use. 

Commenters argued that regulations under the proposed rule aimed at eliminating emissions by 

eliminating altogether the generation of electricity reflects a departure from Section 111. 

Commenters argued that EPA in this proposal departs from its own previous understanding of 

Section 111(d) to treat non-use as a BSER. Commenters said, in a background document 

explaining the Section 111 process, EPA notes that BSER-based performance standards are 

"based on the effectiveness of one or more specific technological systems of emissions control 

...." EPA, "Background on Establishing New Source Performance Standards (NSPS) Under the 

Clean Air Act,"; see also id. (noting that Section 111(d) allows accommodations for existing 

sources based on, inter alia, "process design at a particular facility [or] physical impossibility of 
70

installing necessary control equipment"). Commenters argued that outside of the current 

proposal, even the Agency recognizes that BSER refers to "technological systems," "control 

equipment" and similar mechanical or technological improvements.

Commenters argued that the use of facility retirement under Section 111(d) cannot be justified by 

pointing to other broader provisions of the Act that are not technology-based. Commenters said, 

the legal memorandum supplementing the Proposed Rule asserts that Congress has recognized 

reduced utilization in several contexts as a method to reduce air pollution. Commenters asserted 

that the examples provided are distinguishable in important respects and do not provide a 

justification for the proposed approach in this rulemaking. Commenters said, first, the legal 

memorandum provides that "SIPs under CAA section 110, in order to assure reductions in 

NAAQS pollutants to meet attainment requirements, may need to impose emission limits on 

industrial sources that those sources could meet only by “retiring" and offers this as precedent for 

EPA's proposed approach for the ESPS. Commenters argued that this reference is not an 

applicable precedent for requiring the shutdown or reduced utilization of units because NAAQS 

are fixed, health-based standards that essentially set a cap on the total emissions for all sources 

within a region, thus these standards differ substantially from source performance standards, 

which are technology-based standards that seek to make sure that sources are taking advantage of 

emission reduction techniques that are available and that have been demonstrated to work. 

Commenters said, second, the legal memorandum looks to authority under Section 112, 

providing that: Congress was clear that the standards could be sufficiently stringent so that 

"effectively, ... a plant would be required to close because of the absence of control techniques." 

Commenters asserted that this example is distinguishable from the context of regulating existing 

sources under Section 111 since Section 112 requires the application of maximum achievable 

control technology - a more stringent standard than the standard applicable to Section 111.

Response 8: We disagree. For the reasons discussed in the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable in light of the statutory text, 

statutory context, and legislative history.

We also disagree than our interpretation is inconsistent with section 123. Section 123 was 

designed to discourage utilities from taking advantage of variations in “atmospheric conditions” 

by using dispersion techniques or tall stacks. Intermittent controls and other dispersion 

techniques, Congress recognized, “are techniques which seek to reduce concentrations of 

pollutants not by reducing the amounts of pollutants emitted into the air, but rather by relying on 

the dispersion of pollutants throughout the atmosphere.” H.R. Rep. No. 95-294, at 81 (May 12, 

1977). This is so because intermittent load switching is used to reduce emissions from one 

powerplant but increase emissions at another where greater emissions would be permitted. Id. at 

81.

Building blocks 2 and 3, on the other hand, are premised on substitute generation to loweremitting or zero-emitting generators, which does not vary with atmospheric conditions nor does 

it result in greater overall emissions. In this way, the affected source’s emissions would decrease 

and not be offset by an overall emissions increase. Accordingly, we believe our building blocks 

are consistent with section 123.
71

Comment 9: Commenters asserted that the CPP does not “redefine” or “redesign” any particular 

source. Specifically, commenters stated that the EPA’s proposal, which contemplates 

considering the potential for coal-fired boilers to co-fire with or convert to natural gas in 

assessing emission reduction potential in each state, does not attempt to redefine or redesign 

EGU sources. Commenters stated that the CPP offers states and the power sector tremendous 

flexibility in deciding how to reduce greenhouse gas emissions and meet state targets, and does

not force any particular source to fundamentally alter its operations. Commenters asserted that 

each state will choose how to meet its goal through whatever combination of measures reflects 

its particular circumstances and policy objectives.

Commenters presented several arguments that the BSER determination is not limited by any 

notion of "redefining the source". First, commenters dismissed industry arguments about 

"redefining" or "redesigning" the source that refer to policies related to determining BACT under 

the Prevention of Significant Deterioration" (PSD) program of section 165 of the CAA. 

Commenters acknowledged that EPA has previously taken the position that, when determining 

BACT, the agency will not require the source to fundamentally alter its design as a means of 

reducing emissions; commenters noted the policy stems from a concern that it might be 

disruptive for a facility seeking a permit if EPA were to second-guess the operator's choices. 

However, commenters iterated that EPA has also noted in current guidance (see EPA, PSD and 

Title V Permitting Guidance for Greenhouse Gases (March 2011) at 27) that there is nothing in 

the statute that compels this policy against "redesigning" or "redefining" a source. The 

commenters noted that in other cases (Sierra Club v. EPA, 499 F.3d 653, 654-55 (7th Cir. 2007); 

Sierra Club v. U.S. EPA, 499 F.3d 653, 655 (7th Cir. 2007)) the court cited no CAA provisions 

directly when agreeing with EPA that it could choose not to redefine a source in the facilityspecific BACT determination. Further, commenters stated that because the policy is not 

compelled by the statute, EPA has allowed state permitting authorities the discretion to engage in 

a broader analysis that may include “redefining” the source. 

Commenters further urged that any limit on "redesigning" a source is not relevant to the systemwide determination of BSER under section 111(d); commenters recognized that the PSD 

program and the section 111(d) program are substantially different, and urged that making any

analogies between the two with respect to “redefining the source” is inappropriate. 

Commenters argued that an emission guideline under section 111(d) governs a source category 

on a nationwide basis; commenters stated that emissions guidelines are intended to level the 

playing field for the regulated industrial sector and may require some facilities to make extensive 

changes to bring their operations up to par with other members of the source category. Therefore, 

commenters argued that the notion of not "redefining a source" is less relevant to nationwide 

standards for entire source categories. 

Commenters also asserted that the statutory language on BACT is distinctly different from the 

statutory language on BSER. Specifically, commenters provided that the definition of BACT 
72

includes the term "system" within a much longer list of other possible descriptions of the scope 

of the BACT inquiry ("production processes and available methods, systems, and techniques, 

including fuel cleaning, clean fuels, or treatment or innovative fuel combustion techniques"), 

whereas section 111(a)(1) simply calls for standards of performance to be based on the best 

"system" of emission reduction, with no list of possible pollution reduction mechanisms. 

Commenters stated that in light of the different statutory text, structure, practical, and policy 

considerations between the two programs, EPA is within its discretion to interpret the scope of 

the BSER inquiry to be broader than the BACT inquiry. Commenters also noted that although 

the statutes regarding BACT provide that a BACT standard should not be less stringent than "any 

applicable standard established pursuant to section 7411 or 7412 of this title" (i.e., the section 

111 standards serve as a "floor" for the BACT limit), this does not mean, if EPA has chosen not 

to "redefine the source" for BACT, it should not do so in the section 111(d) standards. 

Commenters asserted it would be perverse for a narrow policy interpretation of BACT to 

influence EPA's BSER determination because the latter determination would periodically elevate 

the BACT floor.

Finally, commenters also stated that evidence that the BSER determination is not limited by any 

notion of "redefining the source" is found in the regulations implementing section 111(d) (40 

C.F.R. Pt. 60, Subpt. B (40 C.F.R. sections 60.20-60.31); commenters urged that nowhere do 

those regulations prohibit EPA, when establishing emission guidelines for the states to 

implement BSER, from considering alterations of the operations of the regulated facilities. 

Response 9: We agree with commenter that there are important distinctions between a source 

specific BACT and BSER and that the redefining the source concept is inapplicable in the BSER 

context.

Comment 10: The commenters argued, the large number of retirements that would be 

necessitated by EPA's guidelines provides further evidence that EPA's approach to determining 

BSER exceeds the agency's statutory authority. The commenters argued that requiring the 

premature closure of coal-fired EGUs that have not completed their planned useful lives as 

assumed and approved by state regulatory authorities would create a significant regulatory 

problem for state utility regulatory authorities and ratepayers. The commenters argued that these 

plants were built to fulfill U.S. Energy Policy dating back to 1977, when natural gas and oil were 

in short supply, and the federal government sought to fulfill America's energy needs by reducing 

dependence on supplies of oil and gas and instead encouraging a switch to coal. Commenters 

stated that Iin 1978, the Power Plant and Industrial Fuel Use Act took effect, with the purpose of 

encouraging and fostering the greater use of coal and other alternate fuels-in lieu of natural gas 

and petroleum-as a primary energy source. Commenters stated Ccoal-fueled generator units built 

during this time period generally had 40-60 year useful lives, and the utilities that constructed 

them planned on investment returns over the entire useful lives of the units. Commenters stated 

Aa large amount of this generating capacity remains online, and . The commenters argued that 

premature closures of coal-fired plants should not be required by new federal rules, especially 
73

when these same plants were built to fulfill U.S. Energy Policy. Instead, commenters asserted, as 

required by the CAA, EPA must consider the "remaining useful lives of the sources."

Response 10: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

As we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect 

an achievable emissions limit through the application of the BSER and do not in themselves 

require states or sources to implement the BSER. That is, EPA is responsible for determining the 

level of emission limitation from the source category, while states have the responsibility of 

assigning emission requirements to their sources that will ensure their achievement of that level 

of emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the BSER.

Commenter’s arguments are addressed in section VIII.G.1 of the preamble and section IX of the 

Legal Memorandum.

Comment 11: Commenters asserted states plainly have the ability to develop plans to achieve 

emission reductions and take advantage of the many benefits of gas-fired generation, and sources 

in turn are capable of achieving compliance. Commenters said, a strategy to reduce emissions 

and take advantage of clean-burning natural gas generation resources throughout the source 

category also promotes beneficial environmental and energy impacts. Commenters said, for 

example, NGCC utilization carries the important environmental co-benefit of reducing emissions 

of conventional pollutants, in addition to reducing CO2 emissions. [See, e.g., 79 Fed. Reg, at 

34,841. See, e.g., RIA at 4-17.] Commenters said, moreover, expanding utilization of 

domestically produced natural gas supplies promotes fuel diversity and energy independence. 

Commenters said, since emission reduction measures within the regulated source categories have 

already been undertaken by sources covered by the proposed rule, they may be considered to be 

adequately demonstrated.

Response 11: EPA has included redispatch to existing natural gas in the final BSER.

Comment 12: Commenters opposed the alternative BSER calculation method that relies solely 

upon building block 1 for HRI at coal facilities. Commenters said this approach would not be 

consistent with statutory requirement for the BSER as it does not adequately consider proven 

existing state frameworks for reducing carbon emissions or the greater usage reductions from 

existing coal facilities through efforts put forth in blocks 2, 3 and 4.
74

Commenters stated that building block 1 is the only block in which EPA attempts to curtail 

emissions from designated facilities. Commenters believed building block 1 to be unlawful for 

other reasons, but is the only block which aims to accomplish what all BSER is required to do: 

derive improvements from an existing source and consider the remaining useful life of the 

facility in determining whether and, if so, to what extent, to require such reductions. Commenters 

continued that the "outside-the-fence-line" and "beyond-the-source-category" measures in BSER, 

is contrary to both law and best practice. Commenters said that EPA must establish procedures 

and emissions guidelines, and each state then develop a plan which establishes standards of 

performance for any existing source for any air pollutant. Commenters questioned EPA's 

understanding of the terms "performance" and "existing source."

Commenters said the amount of reduced utilization would reflect all of the policies and emission 

reductions associated with building blocks 2, 3, and 4. Commenters said those policies would 

not, however, be express components of state plans, but would instead be complementary 

measures. Commenters said EPA has no authority to establish a standard of performance based 

on reduced utilization of a source, and this alternative is therefore unlawful. Commenters said 

under section 111, a standard of performance is a standard for "emissions of air pollutants." 

Commenters said it is not a standard for operation of the source. Commenters said there is no 

ambiguity in the statute that would allow EPA to read this limitation out of section 111. 

Commenters said every indication is that Congress intended this provision to be construed 

narrowly. Commenters continued section 111(b)(5) prohibits EPA from imposing "any particular 

technological system of continuous emission reduction to comply with any [NSPS]." 

Commenters said if a particular technology requirement is a step too far, ordering cessation of 

operations cannot be a permissible option. Commenters said a standard of performance is 

required to address a source's maximum design emission rate, not its total emissions. 

Commenters said a section 111 standard of performance must reflect measures that reduce a 

source's rate of emissions. Commenters said the CAA addresses this matter specifically, clearly 

distinguishing between emission standards and performance standards. Commenters said an 

emission standard "limits the quantity...of emissions of air pollutants." Commenters said 

performance standard, on the other hand, requires "continuous emission reduction." Commenters 

said imposing a limit on operation does not require continuous emission reduction. 

Response 12: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

While the BSER is not based on reduced utilization as a stand alone measure, we address 

reduced utilization in section V.B. of the preamble as well as the Legal Memorandum.

Comment 13: Commenters stated EPA’s proposal to utilize 'beyond the fence line' measures to 

develop a calculation of BSER that would apply to affected units on the grounds that reduced 

generation remains BSER cannot withstand scrutiny, as activities that lie outside the control of 

the affected unit cannot possibly be proven "technically feasible." Commenters said because 
75

EPA is relying on BB measures (such as RES or EE mandates) that have not been adopted in 

many states it is arguable whether these measures are "adequately demonstrated."Commenters 

stated EPA points to other CAA provisions that the Agency argues allow for requirements to 

reduce operations. Commenters said these programs do not support such an interpretation of 

section 111. Commenters said the NAAQS program and the residual risk provisions of section 

112 impose general requirements to protect the public health. Commenters said Section 111, on 

the other hand, requires source-specific standards of performance found to be achievable and 

cost-effective at individual sources. Commenters said voluntary shutdowns contained in 

settlement agreements provide no support for the conclusion that EPA may impose such 

obligations via regulation. Commenters continued if EPA were able to establish operation levelbased standards, it would effectively be authorized to determine the size of any source. 

Commenters said this is fundamentally at odds with the principle that EPA cannot "order a 

fundamental redesign of the facility." See UARG v. EPA, 134 S. Ct. at 2448.

Commenters stated in the alternative methods outlined in the NODA, the underlying goal-setting 

algorithm governing building blocks 3 and 4 provide emissions reductions through displacement 

of all of New Jersey's coal and oil-fired generation along with a significant amount of existing 

NGCC generation. Commenters said for the reasons previously identified in the proposed 

application of building block 2, this is not a realistic or a reasonable outcome.

Commenters stated EPA's proposed interpretation would give the agency effectively unlimited 

authority to decide which types of generation, or production process of any product, will be 

allowed within the United States. Commenters said the EPA is attempting to argue that it has the 

authority to set BSER to force companies to reduce operations or cease business operations all 

together based solely on the EPA decision that the product that company produces can be 

produced using a different technology that the EPA finds to be acceptable. Commenters said not 

only is this interpretation a gross overreach of authority, it is also clearly contrary to section 111, 

and commenters quoted section 111(b)(5) states that "nothing in this section shall be construed to 

require, or to authorize the Administrator to require, any new or modified source to install and 

operate any particular technological system of continuous emission reduction to comply with any 

new source standard of performance." Commenters said blocks 2 and 3 in particular specifically 

meet the FCAA definition of "technological system of continuous emission reduction", i.e., a 

technological process for production or operation by any source which is inherently lowpolluting or nonpolluting. Commenters said while the EPA may attempt to argue that this 

provision would only apply to new source performance standards, it would be irrational of the 

EPA to assume that Congress' intent was the EPA should establish more stringent emission 

standards on existing sources than it has determined to be feasible for new sources; yet, this is 

exactly what the EPA has proposed with this rule under section 111(d) and its prior proposal for 

new sources under section 111(b). Commenters added the state goals for Texas and many other 

states, are more stringent than the EPA's proposed standards of 1,100 lb/MWh for new coal-fired 

EGUs and 1,000 lb/MWh for new large NGCC units, and that there are no existing fossil fuelfired EGUs that can meet the 791 lb/MWh final standard that the EPA has proposed for Texas, 

thereby forcing the state to rely on RE generation facilities. Commenters said the EPA may 
76

attempt to argue that they are not requiring any source to install any particular technology 

because the proposed rule only establishes emission guidelines for the states, but given the lack 

of alternatives for the states to comply with their state goals without requiring reduction in 

generation at some sources and expansion of RE, the effect is still the same. Commenters said 

the EPA is requiring the installation of particular technological systems of continuous emission 

reduction, using the states as the intermediary.

Commenters stated EPA's proposed "alternative approach" for the BSER, under which affected 

EGUs would be required to reduce their mass emissions by the amount achievable if building 

blocks 2, 3, and 4 were applied is inappropriate. Commenters said EPA lacks the statutory 

authority to force these affected EGUs to shut down or operate for fewer hours so that natural 

gas, RE sources, or demand side efficiency improvements can fill that void. Commenters said 

this "alternative" reflects a distinction without a difference. Commenters said the alternative

approach imposes the same requirements and leaves states with the same options it had under the 

first building-block approach. Commenters said it is an alternative approach in name only, not in 

substance. Commenters said at its core, the alternative approach is just an attempt by EPA to 

disguise its impermissible "outside the fence" interpretation of BSER. 

Commenters stated EPA's "alternative" approach to BSER is unjustifiable. Commenters said 

EPA identifies the "system of emission reduction" to be, in the alternative, the reduction of 

affected EGUs' mass emissions that are achievable through reductions in generation, in addition 

to the efficiency gains set out in building block 1. Commenters said this formulation is far afield 

from what can be required of a state plan under section 111(d), as a section 111(d) plan 

"establishes standards of performance for any existing source." Commenters said the plain 

language construction of the phrase "for any existing source" can only mean that the emissions 

standard must be set at a level that a source itself can achieve. Commenters said this is consistent 

with Section 111(d)'s focus on control technology at the particular source, as will be discussed 

later in these comments. Commenters said finding that a reduction of utilization at an EGU 

through building blocks 2, 3 and 4 could satisfy a standard of performance for a source would set 

EPA up in the role as an environmental super-regulator who could require any industry subject to 

NSPS to produce less and its associated customers to consume less, thereby substituting the 

agency's judgment on investment and production decisions for that of the company's owners and 

operators, undermining commercial needs and expectations. Commenters said Congress could 

not have given EPA the authority to micromanage the nation's economy through the CAA. 

Commenters stated EPA cannot rely on other, arguably broader provisions in the CAA to expand 

its authority under section 111(d). Commenters said EPA's reliance on the use of reduced 

operation or facility retirement as a means of complying with a national ambient air quality 

standard is misplaced. See 79 Fed. Reg. at 34,889; Legal Memo at 83. Commenters noted EPA's 

explanation, 40 Fed. Reg. at 53,343, that section 111 standards of performance are technologybased and differ from the health-based NAAQS that essentially set a cap on the total emissions 

for all sources within a region. Commenters said because a NAAQS sets a fixed ambient air 

quality standard that must be collectively achieved by all sources in a given region, it differs 
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from the source-specific BSER analysis that must be applied to set performance standards for 

existing sources under section 111(d). Commenters said EPA's reliance on the legislative history 

of Section 112 is equally misguided (See EPA, Legal Memo at 83), and while technology-based 

in the first instance, section 112 applies a more stringent MACT standard than the BSER 

standard applied under section 111. See 42 U.S.C. section 7412(d)(2). Commenters said for 

existing sources, EPA is required to apply that standard in a rigid and mechanical way by 

calculating "the average emission limitation achieved by the best performing 12 percent of the 

existing sources." Id. Section 7412(d)(3). Commenters said courts have held that EPA lacks the 

discretion to deviate from this formula to address specific challenges faced by individual sources. 

See Cement Kiln Recycling Coalition v. EPA, 255 F.3d 855, 880 (D.C. Cir. 2001) ("EPA may 

not deviate from section 7412(d)(3)'s requirement that floors reflect what the best performers 

actually achieve by claiming that floors must be achievable by all sources using MACT 

technology."). In contrast to this rigidity, commenters stated, section 111(d) directs states to take 

a flexible approach in setting standards of performance that permits the application of less 

stringent standards of performance based on source-specific challenges. See 42 U.S.C. section 

7411(d)(1). Commenters said these important differences suggest that reduced operations or 

forced retirements are not permitted as standards of performance under section 111(d).

Commenters stated that EPA seeks to justify the rule by asserting that "reduced generation by 

higher-emitting sources is one of the compliance options available to and used by EGUs to 

comply with the CAA acid rain program in CAA Title IV, as well as the transport rules that we 

refer to as the NOx SIP Call and the Clean Air Interstate Rule (CAIR)." 79 Fed. Reg. at 34,889. 

Commenters said EPA fails to recognize the critical difference between standard setting and 

compliance. Commenters said they fully support flexible compliance options that allow regulated 

entities to engage in voluntary programs to identify least-cost options-including the option of 

reduced generation-for complying with emission reduction goals; however, in the programs 

described by EPA, reduced generation was an option available for compliance; it was not a factor 

used to set the emissions limits established for those trading programs. Commenters concluded 

there is no basis for EPA to rely on those programs in order to support the inclusion of reduced 

generation at the standard setting stage, and that EPA has failed to identify any precedent within 

the Clean Air Act that would allow it to mandate the retirement of coal-fired EGUs when 

establishing standards of performance under Section 111(d). 

Commenters stated that EPA attempts to backstop its lack of legal authority for blocks 2-4 by 

presenting an alternate legal argument based on the principle that reduction in generation at the 

affected EGUs is itself BSER. The commenters said EPA's argument is flawed, because 

reduction in generation is not the application of any system; it is an effect resulting from other 

activities. The commenters said EPA cites examples such as the FCAA Acid Rain Program, the 

NOX SIP Call rule, and CAIR as justification, rationalizing that reduction in generation is one of 

the compliance options available to and used by EGUs to comply with these requirements. The 

commenters agreed that reduction in generation may be an option for companies to comply with 

mass-based regulatory requirements such as those cited by the EPA, but pointed out that there is 

a fundamental difference between a reduction in generation being an option for compliance with 
78

a regulatory requirement and being the sole basis for the regulatory requirement. Commenters 

said the standards under the regulatory requirements which the EPA cites as examples were 

developed based on application of adequately demonstrated pollution control technology, and, as 

such, the examples the EPA provides are irrelevant and do not establish the precedent the EPA 

claims.

Response 13: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 14: Commenters stated the alternative BSER continues to be based on the beyondthe-source measures that constitute building blocks 2, 3, and 4. Commenters said reliance on the 

building blocks as complementary measures, rather than as formal plan components, while 

nevertheless effectively mandating their use through the proxy of an operation or emission cap, 

does not rescue EPA's Proposal. Commenters said those measures remain unlawful components 

of BSER regardless of the format in which EPA chooses to present them.

Response 14: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 15: Commenters asked that EPA withdraw the Proposed Rule and initiate a direct 

dialogue with North Dakota and the states to develop an alternate approach based on governing 

law, recognition of varying state circumstances and energy make up, state infrastructure and 

available technologies for existing power generation facilities.

Response 15: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 16: Commenters supported the alternative BSER stated that many existing programs 

for reducing electricity-sector GHG emissions work precisely because high emitting sources 

reduce generation as low-emitting sources increase their generation. Commenters gave the 

example of the New York State Department of Public Service that conducted extensive modeling 

to predict the economic and environmental effects of that state's RPS and concluded that 

increased renewable energy generation under the policy would displace generation from highemitting sources, primarily natural gas-, coal-, and oil-fired units. Commenters also referenced a 

recent white paper that concluded that renewables introduced in states with RPSs in the RGGI 

region almost entirely substitute for coal base load. Commenters also noted EE programs and 
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noted freely available tools, such as EPA's AVERT, allow policymakers, utilities, and other 

stakeholders quantify the CO2, NOx, and SO2 impacts of state and multi-state renewable energy 

and energy efficiency programs.

Commenters said EPA has long encouraged states to take advantage of energy efficiency 

measures to cost-effectively control EGU emissions such as the 1998 NOx SIP Call Rule that 

allowed states to set aside allowances in their cap-and-trade programs for reductions achieved 

through RE and EE measures and, in 2007, seven states had set-asides for these kinds of 

reductions. Commenters said, implementing the NOx SIP Call with set-asides for EE reductions, 

states have noted the economic benefits of achieving reductions in this manner. Commenters 

referenced CAIR RE and EE measures adopted and Connecticut's set aside 10% of its summer 

ozone season allowances for RE and EE projects. 

Commenters stated, in the marketplace, renewable generation and EE displace generation at 

affected units because they can meet electricity demand at lower marginal cost. Commenters 

referenced a recent article that described the mechanism by which low-emitting sources displace 

higher-emitting sources in electricity capacity markets.

Commenters stated, the particular generation that a low- or zero-emitting resource will replace -

and, consequently, the resultant emissions reductions on the grid - depend on the resource's 

location. Commenters said, specifically, the units that set a transmission region's marginal price 

have historically been a primary driver of how low- or zero-emitting resources reduced 

generation at affected units. Commenters said, historical data on these "locational marginal 

units" demonstrates the ability of clean energy and EE to displace generation from high-emitting 

sources. Commenters said, models for estimating the GHG emission reductions from EE 

programs incorporate data about the hourly marginal emissions rates for local electricity, even 

when the programs do not place EE resources on the electricity capacity market. 

Response 16: EPA appreciates these supportive comments.

Comment 17: Commenters stated BSER should be based on only inside-the-fence application 

and should apply directly to the affected EGU and not be a system comprised of multiple 

affected EGUs and "entities." Commenters said it is unlawful for EPA to develop a BSER that 

requires emission increases from existing NGCC units. Commenters said EPA continues to cite 

concern that HRIs at coal-fired EGUs might make them more competitive and they will therefore 

increase their generation making them less effective at reducing CO2 emissions; the "rebound 

effect." Commenters said EPA uses this to further justify increased utilization of NGCC, which 

Ohio EPA notes increases their CO2 emissions. Commenters said they are having difficulty with 

U.S. EPA's concern regarding a potential "rebound effect." Commenters said they cannot 

identify another federal or state regulatory requirement that requires significant monetary 

investment in a control strategy that reduces emissions (such as HRIs) coupled with an 

expectation that the investment should result in reduced operation. Commenters said the 

principle behind investment in control is that more efficient and well-controlled facilities will 
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operate more than less efficient and controlled facilities. Commenters said under building block 

1, EPA is requiring large investments to make coal-fired EGUS more efficient; however, coupled 

with building block 2, these same EGU owners are instructed to operate less, or in a cycling 

manner, which in turn reduces the efficiency of these units. Commenters said this is counter to 

basic engineering principles and common sense, and this is not the manner in which section 

111(d) is intended to be implemented. Commenters said "rebound effect" should not be a 

consideration under this proposal and believes this is another reason why this proposal needs to

be completely reconsidered. Commenters said EPA acknowledges it is less cost-effective to 

implement building blocks 1 and 2 together than to implement building block 1 alone, and this is 

an additional reason why increased utilization of NGCC is not appropriate as the BSER. 

Response 17: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

We discuss substitute generation under building block 2 in section V. of the preamble. 

Comment 18: Commenters stated EPA may not group coal-fired and NGCC units in a single 

target. Commenters said EPA's obligation is to provide a guideline document that determines the 

BSER for the existing stationary sources, by category, if needed. Commenters said EPA's 

proposed rule establishes no such guideline applicable to a category of sources but instead sets a 

target for a state while acknowledging that there are substantial differences between EGUs 

within the state. Commenters said EPA's grouping of such disparate units under a common goal 

violates section 111 because it is not the BSER for NGCC units when the state Interim and Final 

Goal greatly exceeds what those units can achieve in practice. Commenters said EPA's statewide goal violates section 111 for coal-units in states with low Interim and Final Goals because it 

is not "adequately demonstrated" for such units. Commenters said EPA's goal violates equal 

protection because it treats similarly situated units disparately without meaningful basis. 

Commenters said this is particularly true in Arizona, which must reduce emissions by 52% while 

most other states have less stringent reduction requirements, and six states have final goals that 

are higher than Arizona's 2012 baseline emission rate.

Response 18: In the final rule EPA has adopted separate coal and gas rates.

Comment 19: The following commenters said the 111(d) standards cannot be more stringent 

than the 111(b) standards.

Commenters stated setting goals for existing units that are more stringent than the goals for new 

units will not survive legal challenge. Commenters said the CAA requires a Section 111(b)

standard before there is a Section 111(d) standard, for good reason. Commenters said the Section 

111(b) standard for new units should set a floor for existing units under Section 111 (d). 
81

Commenters said it is simply not reasonable to set standards for existing units that are more 

stringent than the standard for new units.

Response 19: We disagree that the section 111(d) standards are more stringent than the section 

111(b) standards. Further, we explain in the Legal Memorandum why the section 111(b) and (d) 

standards are based on different determinations of the BSER. The use of the term “ordinarily” in 

the 1975 preamble reflects the agency’s long term understanding that standards under 111(d) 

may differ from those under 111(b). In any case, the statute does not dictate that 111(d) standards 

must be less stringent in all cases. Rather, Congress recognized that the agency would be faced 

with different sets of challenges in regulating existing rather than new sources. Congress 

addressed this in part by establishing a cooperative-federalism planning regime under section 

111(d) similar to section 110. Reflecting this, the guidelines include significant flexibilities, 

including the ability to trade and relatively long periods for compliance

Comment 20: The following commenters believe that Building Blocks 1 and 2 contain the 

correct affected units, but disagree with the method proposed.

Commenters stated the alternative of using only the first two building blocks is more realistic 

and defensible than using all four building blocks; however, neither EPA nor South Dakota have 

the authority to require one business to operate above its actual capacity and require another 

business to offset that dispatch by reducing its output, as required by building block 2. 

Commenters said EPA's building block 1 is also flawed, and South Dakota recommends that 

both building blocks be withdrawn and replaced with a proposal that allows states to conduct a 

case-by-case analysis for establishing the BSER for each existing electric generating units.

Response 20: : For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

The commenter has not provided a sufficient basis for us to conclude that it alternative would be 

appropriate under 111 or constitute BSER.

1.9.3 Evaluation of Building Block 1, heat rate improvements, against the BSER criteria

Comment 1: Commenters stated BSER Building Block 1 is the only component of BSER within 

the regulatory jurisdiction of EPA and WDEQ. Commenters said even as WDEQ considers this 

block within its regulatory jurisdiction, there is no precedent for requiring reduced heat rates 

through a NSPS.
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Response 1: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

As we also explain in sections V.A, V.B, and V.C of the preamble, our emission guidelines 

simply reflect an achievable emissions limit through the application of the BSER and do not in 

themselves require states or sources to implement the BSER. That is, EPA is responsible for 

determining the level of emission limitation from the source category, while states have the 

responsibility of assigning emission requirements to their sources that will ensure their 

achievement of that level of emission limitation. States may fulfil their responsibility by 

establishing emission standards or creating plans consistent with the guidelines. In doing so, 

states will be able to choose from a wide range of emission reduction measures, including 

measures that are not part of the BSER. Accordingly, contrary to commenters’ contention, this 

rule does not “requir[e]” heat rate improvements.

Comment 2: The following commenters believe EPA needs to consider states with EGUs that 

are well-run and maintained so they operate efficiently.

Commenters stated reducing generation from higher-emitting affected EGUs can be carried out 

within the fence-line of a plant, and is a viable option for achieving CO2 emission reductions; 

however, several North Carolina EGUs have already shifted to intermediate operations and 

reduced their CO2 emissions. Commenters said the options for states that have taken action prior 

to 2012 may not have the flexibility to further reduce generation while continuing to meet the 

electricity demand in a reliable and affordable manner. Commenters added a multi-year average 

should be used in conjunction with the statutory factors for developing BSER on a case by case 

basis.

Commenters stated EPA's approach fails to consider whether an individual source has already 

adopted best practices and made equipment upgrades. Commenters said this inequitable outcome 

is a direct result of EPA's decision under building block 1 to select a uniform percentage target 

for reducing emissions, rather than a uniform emission rate. Commenters said EPA has proven it 

can adopt a BSER that does not penalize existing low-emitting sources. Commenters said for 

example, pursuant to 40 C.F.R. 60.31(d), existing sulfuric acid production units must not emit 

more than 0.25 grams of sulfuric acid mist per kilogram of sulfuric acid produced. Commenters 

said sulfuric acid production units that were already achieving that emission rate when the rule 

was adopted were not expected to achieve additional emission reductions. Commenters said EPA 

it fails to justify setting a uniform percent-reduction target and account for the hardship that 

would be placed on units that already achieved efficiency improvements. 

Commenters stated the 6% HRI proposed is not possible for the plants like the TS Power Plant in 

Nevada. Commenters said it is one of the most efficient in the country and has only been in 

service for six years, limiting its opportunities to make heat rate improvements. Commenters said 

the TS Power Plant reviewed the measures that EPA proposed as reasonable opportunities for 
83

improving heat rate and concluded that only one of them - a neural network - may be feasible at 

the facility and could result in a heat rate improvement of between 0% and 1.5% based on the 

predictions in the S&L Report. Commenters said while the S&L Report estimated a heat rate 

improvement of between 0% and 1.5% for a neural network, Newmont has no basis to believe 

that this would actually improve the heat rate at the TS Power Plant, much less by anything 

approaching 1.5%. Commenters said regardless of the availability of heat-rate improvements at 

other Nevada facilities, EPA's assumption that a state-wide average of 6% is reasonable is flawed 

and cannot form the basis for BSER. 

Commenters stated Building Block 1 stands alone as the sole block aiming to accomplish what 

all BSER is required to do: derive emission improvements from an existing source. Commenters 

said EPA's emission reduction targets for Block 1 are unrealistic and unsupported by any 

administrative record put forward to date. Commenters said there is no precedent or record basis 

for suggesting that emission reductions of 6 percent are achievable by any source, let alone 

across-the-board. Commenters said the 6 percent assumption cannot be squared with the existing 

landscape of utility assets. Commenters said in order to be in compliance with other regulatory 

efforts, many existing facilities have already made substantial investments in emission 

reductions. Commenters said there is scant evidence to suggest that these facilities can do much 

more. Commenters said there is no administrative record to support the efficacy of such efforts, 

or their cost-effectiveness when placed in the context of the remaining life of a given facility. 

Commenters said it is precisely this unit-by-unit assessment that the Clean Air Act requires and 

that EPA's proposed rule abandons.

Commenters stated Building Block 1 must be adjusted to account for the fact that six percent 

heat-rate improvements at coal-fired EGUs may not be achievable in every state because of 

several limiting factors, including previous state or private action to improve energy efficiency of 

such units, installation of pollution control technology that limits heat rate improvements, 

decreased operation due to NGCC redispatch, and low-capacity factors. 

Commenters stated EPA fails to consider the substantial ongoing efforts that companies 

undertake to maximize heat rate. Commenters said many regulatory authorities have tools and 

incentives to encourage electric utilities to operate generating plants efficiently, which 

means many of the most cost-effective projects and best practices are already accomplished. 

Commenters stated most of the cost-effective improvements identified in the S & L study have 

already been implemented in Kentucky, and many of the more significant improvement 

measures are planned for completion in association with the installation and replacement of air 

emission control systems to meet new requirements of the NAAQS and MATS regulations. 

Commenters said EPA should recognize that the addition of these control systems will decrease 

unit efficiency because of the added parasitic loads and increased flue gas system pressure drops. 

Commenters said resulting from this remaining efficiency that can be gained at existing coalfired utilities is minimal. Commenters added many accomplished gains in efficiency will 

diminish over time as natural degradation occurs.
84

Response 2: For the EPA’s response to these comments, see section V.C of the final rule 

preamble of the CPP and Chapter 2 of the GHG Mitigation Measures TSD supporting the final 

CPP. As described in these documents, the EPA’s assessment of average potential heat rate 

improvement is based on an analysis of historical performance—i.e., what actual existing coalfired EGUs have previously achieved—and has been lowered since the proposal. This backwardlooking assessment provides a conservative estimate of the potential heat rate improvement (and 

accompanying reductions in CO2 emission rates) that affected EGUs can achieve on an average 

basis, as described in section V.C of the preamble and Chapter 2 of the GHG Mitigation 

Measures TSD. The precise amount of heat rate improvement feasible at individual EGUs will 

vary. The final CPP provides states the flexibility to develop plans with emission standards that 

more precisely take into account the potential heat rate improvement of individual EGUs—

should states desire to consider potential heat rate improvement at all. Furthermore, if an affected 

EGU cannot meet the particular emission standard solely because it has below-average potential 

to reduce emissions through heat rate improvements, then in instances where the EGU’s state 

plan allows emissions trading, the EGU can acquire credits or allowances from affected EGUs 

that have above-average potential.

Comment 3: Commenters stated that the EPA is proposing a 6% heat rate improvement for the 

state of Minnesota, even amidst the many heat rate improvements Minnesota utilities have 

already completed. The commenters said EPA overlooked in their TSD analysis the degree of 

capital based efficiency projects already deployed in Minnesota, and how operational efficiency 

improvements experience degrading performance between outages. Commenters said due to this, 

when EPA cited utility performance improvement data referenced directly after a maintenance 

outage, EPA should only have recognized about half the performance gained as reflecting 

average improvements over time. Commenters said since Minnesota utilities are practicing a 

mature heat rate improvement program, efficiency enhancements on Minnesota coal units for 

heat rate and duty cycle preservation practices should be viewed as sustaining unit performance 

over time.

Commenters stated a State cannot simply mandate that existing coal-fired EGUs curtail 

operations or close prematurely, as they have an obligation to ensure that there is sufficient 

electricity generating capacity to meet the demand of their citizens. Commenters said in many 

States, existing coal-fired electricity generating capacity is needed to meet electricity demand, 

and States cannot allow, much less mandate, a significant reduction in coal-fired electricity 

generating capacity without adequate assurances that the lost generating capacity can be 

seamlessly replaced. Commenters said contrary to EPA's suggestion, States cannot simply 

assume that other low-carbon sources will step in to fill the void left by forced reduction in coalfired electricity generating capacity. Commenters said to meet their legal obligation to provide 

reliable electricity to their residents, States must necessarily couple any mandatory reduction in 

coal-fired electricity generating capacity with mandatory increases in other forms of generating 

capacity. Commenters added the only way that a State can achieve EPA's proposed emission 

reduction targets while maintaining grid reliability is to adopt a portfolio approach that imposes 
85

legal obligations on other entities. Commenters said because such a portfolio approach is 

unlawful, EPA's proposed emission reduction, as developed under EPA's Building Block 

structure are, by definition, unsupported and, therefore, arbitrary and capricious.

Response 3: EPA is not finalizing the proposed “portfolio” approach, and will not accept state 

plans that attempt to impose emission standards or other CAA compliance obligations on entities 

other than affected EGUs. The state measures approach provides a path for a state to achieve the 

emission performance level as expressed as a state goal in a way that avoids placing enforceable 

emission standards on affected EGUs (unless and until the backstop is triggered). States will 

have a wide range of flexibility in choosing how to demonstrate their affected EGUs are meeting 

a state goal.

For the EPA’s response to the remainder of this comment, see section V.C of the final rule 

preamble of the CPP and Chapter 2 of the GHG Mitigation Measures TSD supporting the final 

CPP. As described in these documents, the EPA’s assessment of average potential heat rate 

improvement is based on an analysis of historical performance—i.e., what actual existing coalfired EGUs have previously achieved—and has been lowered since the proposal. This backwardlooking assessment provides a conservative estimate of the potential heat rate improvement (and 

accompanying reductions in CO2 emission rates) that affected EGUs can achieve on an average 

basis, as described in section V.C of the preamble and Chapter 2 of the GHG Mitigation 

Measures TSD. The precise amount of heat rate improvement feasible at individual EGUs will 

vary. The final CPP provides states the flexibility to develop plans with emission standards that 

more precisely take into account the potential heat rate improvement of individual EGUs—

should states desire to consider potential heat rate improvement at all. Furthermore, if an affected 

EGU cannot meet the particular emission standard solely because it has below-average potential 

to reduce emissions through heat rate improvements, then in instances where the EGU’s state 

plan allows emissions trading, the EGU can acquire credits or allowances from affected EGUs 

that have above-average potential.

Comment 4: Commenters stated dispatch on a basis other than reliability and economics, as 

proposed by the EPA, is likely incompatible with current Utah law. Commenters said reconciling 

legal inconsistencies and responding to a variety of potential legal actions will further increase 

timelines.

Response 4: As explained in Section VIII of the preamble, EPA’s recognition that certain 

states may need time to make changes to state law depending on how they decide to structure 

their state plans was among the reasons for providing states with the ability to obtain an 

extension beyond September 6, 2016. Given the extension, the overall three-year deadline for 

final submittals is consistent with the three-year deadline for SIP submittals under section 110(a), 

and reasonable by comparison with similar or shorter deadlines for submittal of attainment plans, 

as discussed in Section VIII.E.9.a of the preamble. 
86

Comment 5: The following commenters said EPA didn't consider the impacts that controls 

necessary for other rules with have on the heat rate of EGUs.

Commenters stated that EPA ignored the energy penalties (adversely affecting heat rate) 

associated with recently completed emission control projects due to EPA rulemakings. The 

commenters said that affected units will be forced to overcome the energy penalties from 

addition of these controls and then the additional 4 to 6 percent improvement from this rule. The 

commenters said that the EPA has failed to provide a reasonable analysis of whether the heat rate 

improvement targets are achievable, and that EPA's assessment of heat rate improvement 

potential is arbitrary and capricious.

Commenters stated LG&E and KU have already implemented most of the cost-effective 

improvements identified in the S & L study, and many of the more significant improvement 

measures are planned for completion in association with the installation and replacement of air 

emission control systems to meet new requirements of the NAAQS and MATS regulations. 

Commenters said EPA should recognize that the addition of these control systems will decrease 

unit efficiency because of the added parasitic loads and increased flue gas system pressure drops. 

Commenters said as a result, remaining efficiency that can be gained at existing coal-fired 

utilities is minimal. Commenters said many accomplished gains in efficiency will diminish over 

time as natural degradation occurs.

Commenters stated the additional pollution control equipment needed for compliance with the 

MATS rule will further deteriorate heat rate and overall unit efficiency.

Commenters stated in EPA's proposed portfolio approach, the proposed emission reduction 

targets are arbitrary and capricious because they cannot be achieved by existing fossil fuel-fired 

EGUs alone. Commenters said to obtain EPA approval, a State implementation plan must 

identify an "emission performance level for each plan performance period" that is "equivalent to 

or better than the level of rate-based CO2 emission performance goals" established by EPA. See 

79 Fed. Reg. at 34,951 (proposed 40 C.F.R. Section 60.5740(a)(3)). Commenters said each 

emission standard included in the plan must be quantifiable, non-duplicative, permanent, 

verifiable, and enforceable with respect to an affected entity. Commenters continued there are no 

adequately demonstrated emission reduction technologies available to coal-fired EGUs that can 

achieve the emission reduction targets proposed by EPA. Commenters said EPA has 

appropriately ruled out all emission reduction options other than heat rate improvements at coalfired EGUs, and most EGUs cannot achieve even a six percent improvement in heat rate, see 

VII.E.1., supra. Commenters added even if a 12% improvement in heat rate the upper range of 

EPA's BSER projections were possible, coal-fired EGUs would still fall well short of achieving 

EPA's proposed emission reduction targets. See 79 Fed. Reg. at 34,859. Commenters said as a 

practical matter a State implementation plan would have to either impose mandatory limits on 

operating hours or mandate facility closures in order to satisfy EPA's criteria.
87

Commenters stated both of these alternative methodologies are superior to the methodology used 

by EPA in the Proposed Rule in that they account for technical feasibility and equity 

considerations. Commenters said any standard that is not based on a technically feasible 

reduction at the individual unit or within the border of a state is arbitrary and artificially produces 

a more stringent emission reduction for the state. Commenters said the standard violates 111(d) 

principles in that it is no longer based on BSER but is instead based on a fictional target. 

Commenters said the alternative methodologies discussed above are more equitable because they 

do not penalize states by requiring additional HRI where little to no opportunity exists because 

the states are already leaders in achieving low heat rates.

Response 5: EPA is not finalizing the proposed “portfolio” approach, and will not accept state 

plans that attempt to impose emission standards or other CAA compliance obligations on entities 

other than affected EGUs. The state measures approach provides a path for a state to achieve the 

emission performance level as expressed as a state goal in a way that avoids placing enforceable 

emission standards on affected EGUs (unless and until the backstop is triggered). States will 

have a wide range of flexibility in choosing how to demonstrate their affected EGUs are meeting 

a state goal. Furthermore, the final CPP provides states the flexibility to develop plans with 

emission standards that more precisely take into account the potential heat rate improvement of 

individual EGUs—should states desire to consider potential heat rate improvement at all. 

Furthermore, if an affected EGU cannot meet the particular emission standard solely because it 

has below-average potential to reduce emissions through heat rate improvements, then in 

instances where the EGU’s state plan allows emissions trading, the EGU can acquire credits or 

allowances from affected EGUs that have above-average potential. For the EPA’s response to the 

remainder of this comment, see section V.C of the final rule preamble of the CPP and Chapter 2 

of the GHG Mitigation Measures TSD supporting the final CPP.

Comment 6: The following commenters disagree with EPA's proposed 6% heat rate 

improvement and suggest an alternative method.

Commenters stated that building block 1 is the only potential approach for reducing carbon 

emissions from EGUs that is consistent with section 111(d)'s application to sources. Commenters 

disagreed with the approach proposed and suggested that rather than a fixed average CO2 

emission limit rate for each state, BSER for existing coal-fired EGUs should be limited to 

possible heat rate improvements, determined on a case-by-case basis and considering the 

statutory requirements of cost, remaining useful life, and impact on energy reliability. 

Commenters said EPA's indefensible attempt to define a specific limit as BSER fails to account 

for the recommendation by Sargent & Lundy to provide flexibility by performing power plant 

energy audits to determine the availability of cost-effective equipment upgrades and 

commensurate improvements in heat rate. Commenters said their suggested approach allows for 

improvements to be achieved at each EGU.
88

Commenters stated EPA's conclusions as to efficiency improvements from O&M activities are 

not based on a review of the potential effectiveness of available O&M practices at Wyoming 

EGUs at all. Commenters said EPA's 4% conclusion depends on the untested assumption that 

reducing the variability of coal unit heat rates is possible through "best practices" and that 

reducing that variability will lead to better performance. Commenters said EPA relies nearly 

exclusively on 'using heat rate variability as an indicator of the application of best practices and 

potential for improvement." Commenters said although EPA claims it has accounted for all 

sources of heat rate variability, EPA accounts for only two-operating load and ambient 

temperature. Commenters said according to EPA's own analysis, these two factors explain only 

26% of heat rate variability. Commenters said EPA assumes that the other "residual" 74% of heat 

rate variability must be within the control of unit operators and so can be improved. Commenters 

said EPA's assumption ignores numerous causes of heat rate variability that are beyond the 

ability of coal-fueled units to control, such as: (1) variability in pollution control efficiency and 

electricity demand; (2) variability in coal quality, (i.e., heat content (Btus) and moisture); 3) 

variability in other ambient conditions and weather; 4) variability attributable to unavoidable 

cycles in the degradation of components that are designed to wear out over time; and 5) 

variability attributable to changes in heat rate calculation method.

Response 6: For the EPA’s response to this comment, see section V.C of the final rule preamble 

of the CPP and Chapter 2 of the GHG Mitigation Measures TSD supporting the final CPP.

Comment 7: The following commenters disagree that the 4-6% heat rate improvement is 

achievable and disagree with the Sargent & Lundy report on which EPA based their data.

Commenters stated EPA's determination that emissions from every affected coal-fired EGU 

within a state can be reduced by six percent is arbitrary and capricious. Commenters said EPA 

arrived at this target by considering the potential heat rate improvements from adoption of best 

practices to reduce heat rate variability, as well as reductions available by implementing 

equipment upgrades. Commenters said EPA relied on a lone 2009 study by Sargent & Lundy as 

well as inferences derived from hourly data from 900 coal-fired EGUs. Commenters said EPA's 

approach failed to adequately account for variations between individual sources. Commenters 

said when EPA set the six percent emission reduction target, they failed to incorporate its own 

acknowledgment that "individual EGUs would only be able to implement the best practices or 

upgrades that were applicable to their specific designs or fuel types and that had not already been 

implemented." Commenters said as a result of EPA's uniform approach, every source within 

every state is presumed to be capable of achieving EPA's six percent reduction target. 

Commenters said this approach fails to consider whether an individual source has already 

adopted best practices and made equipment upgrades. Commenters said sources that already 

adopted such measures will be penalized for their initiative, as they will be expected to reduce 

their emissions by an additional six percent after having already exhausted what EPA considers 

to be the most cost-effective measures for on-site emission reductions. Commenters said this 

aspect of the proposed Rule therefore has the perverse effect of penalizing affected EGUs, like 
89

those in New Jersey, that have already taken significant steps to limit their CO2 emissions. 

Commenters said EPA's emission reduction target for coal-fired EGUs is arbitrary and capricious 

because it relies on insufficient data to determine what emission reduction opportunities have 

been adequately demonstrated.

Response 7: EPA disagrees that building block 1 “penaliz[es]” EGUs in states that have already 

undertaken substantial heat rate improvements. Those EGUs will generally be closer to 

achieving the uniform CO2 performance rate, as discussed in section V.C of the final rule 

preamble of the CPP and Chapter 2 of the GHG Mitigation Measures TSD supporting the final 

CPP. Furthermore, as we explain in sections V.A. and V.B. of the preamble, our emission 

guidelines simply reflect an achievable emissions limit through the application of the BSER and 

do not in themselves require states or sources to implement the BSER. That is, EPA is 

responsible for determining the level of emission limitation from the source category, while 

states have the responsibility of assigning emission requirements to their sources that will ensure 

their achievement of that level of emission limitation. States may fulfil their responsibility by 

establishing emission standards or creating plans consistent with the guidelines. In doing so, 

states will be able to choose from a wide range of emission reduction measures, including 

measures that are not part of the BSER. This rule does not require states to set emission 

standards based on heat rate improvements.

Comment 8: Commenters stated that FDEP arguably has authority to establish standards related 

to heat rate improvement; however, any such standard would have to be adopted as a rule and, as 

discussed above, EPA's assumed six percent heat rate reduction is not technically feasible. 

Commenters said for that reason, any FDEP rule based upon that assumption could be 

considered arbitrary and capricious under the Florida APA (See Section120.52(8)(e), Fla. Stat. 

(defining "invalid exercise of delegated legislative authority to include "arbitrary and capricious" 

rules"). Commenters said any such rule would cost more than one million dollars to implement 

and, therefore, would require ratification by the Florida Legislature.

Commenters stated while there is a basis for considering a fuel efficiency (heat rate) level or a 

potential improvement in heat rate as BSER, states have the authority in Section 111 to establish 

standards of performance. Commenters said heat rate level or potential improvements in heat rate 

are very case specific, and states are in a better position than EPA to develop case-specific 

standards that consider the Section 111 requirements of achievability, cost, remaining useful life, 

any nonair quality health and environmental impact, and adequate demonstration. 

Response 8: As we explain in sections V.A. and V.B. of the preamble, our emission guidelines 

simply reflect an achievable emissions limit through the application of the BSER and do not in 

themselves require states to implement the BSER. That is, EPA is responsible for determining 

the level of emission limitation from the source category, while states have the responsibility of 

assigning emission requirements to their sources that will ensure their achievement of that level 

of emission limitation. States may fulfil their responsibility by establishing emission standards or 
90

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the BSER. 

For the response to the remainder of this comment, see section V.C. of the final rule preamble of 

the CPP and Chapter 2 of the GHG Mitigation Measures TSD for CPP. As described in these 

documents, the EPA’s assessment of average potential heat rate improvement is based on an 

analysis of historical performance—i.e., what actual existing coal-fired EGUs have previously 

achieved—and has been lowered since the proposal. This backward-looking assessment provides 

a conservative estimate of the potential heat rate improvement (and accompanying reductions in 

CO2 emission rates) that affected EGUs can achieve on an average basis, as described in section 

V.C of the preamble and Chapter 2 of the GHG Mitigation Measures TSD. The precise amount 

of heat rate improvement feasible at individual EGUs will vary. The final CPP provides states 

the flexibility to develop plans with emission standards that more precisely take into account the 

potential heat rate improvement of individual EGUs—should states desire to consider potential 

heat rate improvement at all. Furthermore, if an affected EGU cannot meet the particular 

emission standard solely because it has below-average potential to reduce emissions through heat 

rate improvements, then in instances where the EGU’s state plan allows emissions trading, the 

EGU can acquire credits or allowances from affected EGUs that have above-average potential.

Comment 9: Commenters stated EPA's assumption is unfounded and incorrect. Commenters 

said since 2011, in preparation for compliance with the MATS rule, older power plants with 

higher heat rates that are no longer economically viable have been or are being retired. 

Commenters said these retirements typically eliminate units with higher potential heat rate 

improvement possibilities from the fleet. Commenters said those units where investments have 

already been made to improve operations are less apt to be retired and have less potential heat 

rate improvement opportunities remaining.

Response 9: Insofar as this comment concerns EPA’s view on the impact of retirements 

specifically under building block 1, it is addressed in section V.C of the final rule preamble of 

the CPP and Chapter 2 of the GHG Mitigation Measures TSD supporting the final CPP.

Comment 10: The following commenters disagree that EPA has proved the proposed Building 

Block 1 is achievable.

Commenters stated EPA notes stakeholders have suggested a phase-in of Building Block 1 

would be appropriate. [79 FR 64548] Commenters said they reiterate their comments from the 

June 18, 2014 that U.S. EPA is overestimating both the feasibility and magnitude of heat rate 

improvements (HRI) available, and the ability of utilities to perform HRI in the time provided. 

Commenters said failure to incorporate a phase-in of HRIs in the proposed rule while at the same 

time considering a phase in of NGCC re-dispatch again represents U.S. EPA's lack of 

understanding of the true nature of the operation of coal-fired power plants, the electricity grid 
91

itself, and the amount of time, effort, and resources necessary to upgrade the nationwide coalfired fleet. Commenters said it appears that EPA is choosing a winning fuel, natural gas, over a 

losing fuel, coal. Commenters said if any regulation is legally allowed, states should be assessing 

each individual unit, its historical HRIs, potential for additional HRIs considering remaining 

useful life, and the timing such HRIs would necessitate in determining the standard of 

performance for each individual unit.

Response 10: As discussed in section I.A of the final rule preamble, the interim compliance 

period has been adjusted to begin in 2022, we have provided states with flexibility with respect 

to the glide path, and “early” emissions reductions achieved between 2012 and 2022 can be 

accounted for in demonstrating compliance. The EPA believes that the initial 2022 compliance 

period and glide path flexibility will ensure that EGUs have more than sufficient time to adopt 

the types of heat rate improvement measures envisioned under building block 1 (if states or 

EGUs decide that such measures should be implemented at all in order to meet the emission 

standards in a state plan). For the EPA’s response to the remainder of this comment, see section 

V.C of the final rule preamble of the CPP and Chapter 2 of the GHG Mitigation Measures TSD 

supporting the final CPP.

Comment 11: Commenters stated that while building block 1 addresses measures at the affected 

facility, it still includes measures outside the boundaries of an affected facility. Commenters said 

building block 1 is legally impermissible as a basis for BSER determination and is thus legally 

flawed because it is not technically feasible nor adequately demonstrated.

Commenters stated, EPA's use of certain operating practices and equipment upgrades that serve 

as the basis of EPA's Building Block #1 is improper. Commenters said, as defined within the 

regulation, the "affected facility" under Subpart Da is "each electric utility steam generating 

unit." Commenters said, despite this, EPA attempts to mandate improvements to certain 

equipment not included within this definition and that thus fall outside the sco pe of Subpart Da. 

Commenters said, such equipment includes: steam turbines, water purification equipment, watersupply systems, air cleaning and cooling apparatus, condensers, main exhaust and steam piping, 

water screens, motors, and moisture separators for turbine steam. Commenters said, to the extent 

EPA includes heat rate improvements to components not included within Subpart Da, EPA 

exceeds its statutory authority.

Commenters stated, EPA may not regulate equipment that is not within the Subpart Da category. 

Commenters said, many of the O&M and capital projects identified in the Proposed Rule pertain 

to improvements in operation of steam turbines. Commenters said, Subpart Da, however, 

pertains only to steam generating units. Commenters said, EPA has previously provided a 

drawing that clearly demarcates the steam boiler equipment as subject to Subpart Da and other 

equipment at a coal-fired generating facility, including the steam turbines, water purification 

equipment, water-supply systems, air cleaning and cooling apparatus, condensers, main exhaust 

and main steam piping, water screens, motors, and moisture separator for turbine steam, as not 
92

being subject to Subpart Da. Commenters said, EPA has improperly included many of these 

facilities in its building block one analysis. Commenters said, EPA can establish performance 

standards only for a source "to which a standard of performance under this section would apply 

if such existing source were a new source." Commenters said, the proposed rule cannot include 

equipment that is not part of the Subpart Da source.

Commenters stated, for coal-fired EGUs, the existing NSPS regulations define the "affected 

facility" as the "steam generating unit." See 40 CFR 60.40Da. Commenters said, but the 

Proposed Rule's discussion of potential HRI at the facility fails to differentiate between potential 

HRI improvements based on component changes or "best practices" at the "source," as compared 

to those relevant for the "affected facility." Commenters said, for units undergoing reconstruction 

or modification, which are considered new units under Section 111(a)(2), EPA has always 

defined the "affected facility" as comprising only those within the "boiler island." EPA 

November 1986 Memorandum from Acting Director, Stationary Source Compliance Division, 

Office of Air Quality Planning and Standards John Rasnic. Commenters said, Mr. Rasnic makes 

this clear when addressing the "source" components that may be considered part of the "affected 

facility" for purposes of evaluating whether reconstruction has occurred. Commenters said, he 

writes, "A steam generating unit includes the following systems: (1) Fuel combustion system 

(including bunker, coal pulverizers, crusher, stoker, and fuel burners, as applicable). (2) 

Combustion air system. (3) Steam generating system (firebox, boiler tubes, etc.). (4) Draft 

system (excluding the stack). The affected facility then starts at the coal bunkers, and ends at the 

stack breeching." 

Commenters said, stated differently, only components at the boiler island comprise the "affected 

facility" for NSPS evaluation. Commenters said, moreover, EPA makes clear that there is no 

distinction between components that define the "affected facility" for "existing units" as 

compared to those for new, modified, or reconstructed facilities. Commenters said, on this point, 

EPA states that "the distinction between 'affected facilities' and 'existing facilities' depends on the 

date of construction. Commenters said, the terms are intended to be direct regulatory 

counterparts of the statutory definitions of 'new source' and 'existing source' appearing in section 

111 of the Act." Commenters said, thus, just as for new sources, existing source components 

defining the "affected facility" exclude components such as those defined by the water treatment 

and supply systems, the turbine island, main exhaust and main steam piping, and include only 

components defined by the boiler island, according to EPA's own longstanding interpretation. 

Commenters said, therefore, for evaluating HRI under Building Block 1, consideration of 

improvements to or employment of best practices at components outside of the boiler island are 

"outside the fence line" and cannot be legally part of EPA's HRI mandates.

Commenters stated, moreover, as the NRECA S&L Study concludes, only minimal HRI can be 

associated with upgrading components comprising the boiler island. Commenters said, if EPA 

were to correctly evaluate HRI associated with the affected facility as EPA has historically 

defined it, in accordance with the NRECA S&L study conclusions, the expected HRI would be 

so small as to be impossible to quantify or verify. 
93

Response 11: We disagree with this comment. Commenters propound a “beyond the boiler 

island”1 theory of section 111(d)—that EPA is prohibited from considering any means of 

reducing emission that are not physically applied against the affected Subpart Da facility.2

According to commenters, any best practices or equipment upgrades related to components “not 

included in the Subpart Da facility” are “beyond the purview of this rule,”3 no matter how 

adequately demonstrated, achievable, cost-effective, or integrally related they are to emissions 

from the affected EGU. With respect to building block 1, accepting this theory would mean that 

many of the widely accepted, zero- or low-cost measures for improving heat rate—measures that 

the owners and operators of EGUs already do, and which can actually reduce emissions from the 

affected coal-fired EGU—could not be considered as part of a “system of emission reduction” 

for that source.

Generally speaking, an affected facility is “any apparatus to which a standard [of performance] is 

applicable.”4 In the context of 40 C.F.R. subpart Da, the affected facility—i.e., the apparatus 

subject to the standard of performance—is an “electric utility steam generating unit.”5 Emissions 

are generated in the boiler, and are impelled by the induced draft fan through piping, into the 

stack, and up into the ambient air. 

Commenters cite no legal precedents, statutory provisions, or regulations to support their 

constricted reading of section 111(d). Instead, as their sole legal authority, they cite to a 1986 

Memorandum from John B. Rasnic, then Acting Director of OAQPS’s Stationary Source 

Compliance Division, to James T. Wilburn, then Chief of the Air Compliance Division. 

Commenters omit the title of this memorandum, “Interpretation of Reconstruction,” which 

makes clear that the memorandum concerns the interpretation of the term “reconstruction” in the 

EPA’s NSPS regulations at 40 C.F.R. § 60.15. Specifically, this memorandum, which we refer 

 

1 See Comments of the Utility Air Regulatory Group, Docket ID No. EPA-HQ-OAR-2013-0602-

22768 at 212.

2 For the reasons stated in section IV.E of the final rule preamble, the EPA is combining the 

listing of sources from the two existing source categories for the affected EGUs, as listed in 40 

CFR subpart Da and 40 CFR subpart KKKK, into a single location, 40 CFR subpart UUUU, for 

purposes of addressing the CO2 emissions from existing affected EGUs. The EPA is also 

codifying all of the requirements for the affected EGUs in a new subpart UUUU of 40 CFR part 

60 and including all GHG emission guidelines for the affected sources—fossil fuel–fired electric 

utility steam generating units, as well as stationary combustion turbines—in that newly created 

subpart.

3 See Comments of the Utility Air Regulatory Group, Docket ID No. EPA-HQ-OAR-2013-0602-

22768 at 212–13.

4 Id. § 60.2 (defining “affected facility” for purposes of NSPS); id. (defining “standard” as a 

“standard of performance proposed or promulgated” under 40 C.F.R. subpart 60).

5 40 C.F.R. § 60.40Da(a) (defining the affected facility).
94

to as the 1986 Reconstruction Memorandum, opines on which physical components of an 

existing facility should be “included in reconstruction costs.” See Memo at 3 (emphasis added). 

This is an important distinction when determining whether the NSPS for “reconstructed” sources 

applies to a facility: An existing source becomes a reconstructed source if “the replacement of 

components of an existing facility” is so extensive that, inter alia, the “fixed capital costs of the 

new components exceeds 50 percent of the fixed capital costs” necessary to construct an entirely 

new source.6

 But defining the physical components of a source has little to do with defining the 

measures that the source’s owners and operators can engage in to reduce emissions from that 

source. Contrary to commenters’ contentions, the 1986 Reconstruction Memorandum simply 

does not purport to limit what EPA can consider as part of a “system of emission reduction” 

when establishing emission guidelines for existing sources under CAA section 111(d). 

Commenters are thus wrong to claim that the Reconstruction Memorandum propounds a “longstanding engineering and regulatory understanding” of relevance to identifying the BSER.

Commenters’ mischaracterization of the Reconstruction Memorandum and these emission 

guidelines highlights two significant flaws in their overall arguments about the BSER—not only 

with respect to building block 1, but also regarding building blocks 2 and 3. 

First, these commenters have improperly collapsed the definition of an affected source with the 

means of reducing emissions from an affected source. As illustrated by the Reconstruction 

Memorandum, ascertaining which pieces of equipment are part of an affected source is important 

for determining the applicability of a given NSPS (e.g., the NSPS for reconstructed sources). By 

contrast, as explained in sections V.A–B of the preamble, identifying the best “system of 

emission reduction” entails a broader consideration of the measures that EGU owners and 

operators can implement to achieve an emission limitation applicable to the affected EGU. 

Whether an emission-reducing measure is implemented on or off the boiler island is not itself 

relevant to whether that measure can reduce emissions from equipment in the boiler island. 

Rather, the key fact here is that because of the extensive equipment and systems interconnected 

with the affected EGU at a power plant, the measures identified under building block 1 are 

capable of reducing emissions from the affected EGU regardless of whether they physically 

occur at the part of the power plant defined as the “affected EGU.” Indeed, EPA has recognized 

the interconnected nature of power plant components under Subpart Da itself, by allowing EGU 

owners and operators to meet requirements on a net output basis, which reflects the auxiliary 

load from plant components not included within the boiler island. EPA uses net rather than gross 

standards in this rule as well, further reinforcing the interrelationship between the boiler island 

and the auxiliary load from other areas of the plant. While a gross standard is based only on the 

amount of electricity actually generated, a net standard is based on the amount of electricity that 

is sold to the grid, the latter of which accounts for the amount of electricity that is used 

throughout the facility (on and off the boiler island) for operations, including pollution control 

equipment. 

 

6 40 C.F.R. § 60.15(b)(1).
95

The absurd consequences of commenters’ faulty distinction become clearer still when one 

considers the example of leak prevention, one of the most common measures used by the 

industry to improve heat rate and reduce emissions. EGU owners and operators frequently fix 

steam leaks in the many pieces of equipment and piping at affected EGUs—some on the boiler 

island, and some not. Under commenters’ constricted view of the BSER, the EPA could only 

consider as part of a “system of emission reduction” the efficiency gains that an EGU owner or 

operator can make by fixing steam leaks on the boiler island itself. An otherwise identical leak 

located on piping running to or from the boiler—even one that is inches from a “boiler island” 

leak—would be irrelevant for purposes of the BSER. It would not matter how pervasive such 

leaks are, how cost-effective it is to fix them, how common it is for EGU owners and operators 

to fix them, or that fixing those leaks can literally reduce the emissions of an affected EGU. 

Similarly, although the EPA could consider the availability of add-on pollution controls that 

attach to the boiler island, any add-on controls that reduce emissions to the ambient air by 

attaching to the main exhaust would be “beyond the purview” of what EPA could even consider 

as a system of emission reduction.7

 For these commenters, the practical realities are overruled 

by the fact that some measures that improve the heat rate of the affected EGU do not physically 

occur at the boiler island, even if they incontrovertibly can reduce emissions from the boiler 

island. 

Accordingly, as explained in section V.A and V.B of the preamble, a “system of emission 

reduction” for purposes of CAA section 111(d) means a set of measures that source owners or 

operators can implement to achieve an emission limitation applicable to their existing source. 

Fixing steam leaks at an EGU—whether on the boiler island, in the main steam piping, or near 

the steam turbine—are measures that source owners and operators can (and do) implement to 

achieve emission limitations. The same is true for the other measures we describe under building 

block 1, as well as for the measures included in building blocks 2 and 3. Other measures that 

have the consequence of reducing emissions from an affected EGU, such as coal cleaning, have 

previously been recognized by EPA as part of the best system underlying a final standard, even 

though they do not physically occur at the boiler island and, in fact, may occur outside the 

facility, at a separate facility owned and operated by entities unrelated to the owners or operators 

of the affected EGU.8 For the reasons discussed in section V.A. and V.B. of the preamble and in 

the Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of 

EPA’s authority in light of the statutory text, statutory context, statutory purpose, and legislative 

 

7 See Comments of the Utility Air Regulatory Group, Docket ID No. EPA-HQ-OAR-2013-0602-

22768 at 212 (identifying the “main exhaust” as one component that would be “beyond the 

purview of this rule”).

8 See, e.g., 44 FR 33580, 33593 (June 11, 1979) (evaluated “coal cleaning and the relative 

economics of FGD [flue gas desulfurization] and coal cleaning” together as the “best 

demonstrated system for SO2 emission reduction). The EPA considered an investigation by the 

U.S. Department of the Interior regarding the amount of sulfur that could be removed from 

various coals by physical coal cleaning. Id. at 33593.
96

history. By contrast, commenters’ constricted reading belies all these indicia of congressional 

intent and, as demonstrated here, would lead to absurd results. 

Second, commenters also mischaracterize this rule as an EPA “regulation” of equipment that is 

not part of the boiler island. This rule does not regulate any affected EGU, and imposes no 

requirements on power plant components on or off the boiler island. Nor does this rule require 

sources to implement the BSER. EPA is responsible for determining the level of emission 

limitation from the source category, while states have the responsibility of assigning emission 

requirements to their sources that will ensure their achievement of that level of emission 

limitation. States may establish emission standards or create plans consistent with the guidelines, 

and will be able to choose from a wide range of emission reduction measures, including 

measures that are not part of the BSER. The degree of heat rate improvement included in the 

BSER is not a “requirement” that affected EGUs improve their heat rate. Similarly, the heat rate 

improvement measures that EPA has provided as examples of the best practices and equipment 

upgrades that affected EGUs can implement—whether on or off the boiler island—are not 

themselves “require[d] improvements” at any specific EGU, even one implementing the BSER. 

Comment 12: The following commenters expressed concern that Building Block 1 would 

trigger NSR.

Commenters stated large capital projects designed to assist with unit efficiency improvements 

are subject to PSD according to EPA and have historically been the subject of litigation that has 

been filed by EPA and third party environmental groups against some coal-fired electric utility 

units. Commenters said EPA and citizen plaintiffs have long targeted efficiency-improving 

measures like steam turbine upgrades in NSR enforcement suits alleging that such measures 

constitute "major modifications" triggering strict PSD permitting requirements. Commenters said 

EPA acknowledges the issue, but merely states that it expects only a "few instances" in which an 

NSR permit would be required for energy efficiency projects; however, potential NSR concerns 

will continue to be a major impediment to energy efficiency projects unless EPA provides a clear 

and unequivocal statement that such energy efficiency projects do not trigger NSR. Commenters 

said unless EPA provides such a statement, it will fail to demonstrate the achievability of its 

proposed goals as required by Section 111.

Commenters stated in EPA's simplified view of utility operations, a power plant could easily 

invest in equipment upgrades that would result in heat rate improvements. Commenters said this 

scenario fails to consider the reality that major equipment upgrades take time and must be 

permitted, and in many cases would trigger the Clean Air Act's NSR permitting requirements. 

Commenters said EPA raises concern that heat rate improvements could increase generation at 

some facilities, but EPA appears more concerned about a potential "rebound" effect in which 

emissions would increase rather than the potential permitting implications of efficiency 

improvements related to equipment upgrades. Commenters said the flexibility afforded states 

under other building blocks is unlikely to enable them to work with EGUs to avoid triggering 
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NSR because the limits are so stringent that states (particularly Nevada) simply don't have any 

flexibility. Commenters said EPA is engaged in an enforcement initiative that targets exactly the 

types of heat rate improvement projects proposed for compliance with Building Block 1, 

including upgrades to components such as soot blowers, boilers, economizers, turbines, heaters, 

condensers, pulverizers, and condensate pumps, among others. Commenters said if EPA is to 

rely on equipment upgrades as a means of meeting Building Block 1 targets, EPA should provide 

that heat-rate improvement projects undertaken to comply with the existing source emission 

guidelines are exempt from NSR as routine maintenance. Commenters said EPA should also 

provide that NSR does not apply to units that undertake heat-rate improvement projects that do 

not increase emissions.

Commenters stated the consequences of an NSR enforcement action is of particular importance 

in light of EPA's proposal to set separate standards for "modified" sources under Section 111(b). 

Commenters said even if a source undertakes a "modification" to improve heat rate that does not 

trigger the Section 111 definition of a "modification," if the upgrade qualifies as a "major 

modification" under the NSR program, the floor for a determination of "Best Available Control 

Technology" is the Section 111(b) modified source standard. Commenters said in light of the 

potentially serious consequences of the Proposed Rule, which in turn reduces the likelihood that 

EGUs will be willing to undertake the very equipment upgrades on which EPA relies for its 

determination of BSER, EPA must address directly the interplay of the various proposed Section 

111 rulemakings and the Clean Air Act's NSR provisions. 

Response 12: For the EPA’s response to these comments, see section X.A of the final rule 

preamble and Chapter 7 of this RTC.

1.9.4 Evaluation of Building Block 2, re-dispatch, against the BSER criteria

1.9.4.1: Problems with re-dispatch

Comment 1: Commenters stated the NGCC 70% capacity factor re-dispatch for goal-setting is 

not an emissions standard, and it increases NGCC emissions and does not consider reliability, 

cost, or ownership.

Response 1: The 70% redispatch to NGCC is not part of the BSER determination for NGCC 

and thus the comment is misplaced. Moreover, for the reasons discussed in section V.A. and 

V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is 

reasonable and within the scope of EPA’s authority in light of the statutory text, statutory 

context, statutory purpose, and legislative history. Application of the BSER, including building 
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block 2, will lead to significant overall reductions of CO2 emissions. Also, as explained in 

section V. of the preamble, we have taken the enumerated considerations of section 111(a)(1) 

into account, including cost, and have also considered reliability in promulgating this rule.

Comment 2: Commenters stated EPA may not designate re-dispatch as BSER because this 

"system" would lead to an increase in CO2 emissions from some affected stationary sources. 

Commenters said under section 111(d), states establish "standards of performance" for existing 

stationary sources. Commenters said the CAA contains two definitions of the term "standard of 

performance." Commenters said Section 111(a)(1) defines a "standard of performance" as "a 

standard for emissions of air pollutants which reflects the degree of emission limitation 

achievable through the application of [BSER]." Commenters said Section 302(l) (a general 

section of definitions applicable to the entire CAA), meanwhile, defines "standard of 

performance" to mean "a requirement of continuous emission reduction, including any 

requirement relating to the operation or maintenance of a source to assure continuous emission 

reduction." Commenters said these definitions are not in conflict; therefore, under standard rules 

of statutory construction, these definitions must be read together. (See Reiter v. Sonotone Corp., 

442 U.S. 330, 339 (1979); Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000); Nat'l 

Cable & Telecomms. Ass'n v. Gulf Power Co., 534 U.S. 327, 335 (2002)). Commenters said 

because these definitions must be read together, a standard of performance under section 111(d) 

must be based on BSER and require "continuous emission reductions." Commenters said 

although the CAA does not define the term "continuous," it should be given its ordinary 

meaning: the Merriam-Webster Dictionary defines "continuous" to mean "marked by 

uninterrupted extension in space, time, or sequence." Commenters said in order to satisfy the 

plain language of the CAA, state performance standards must require continuous, or constant, 

reductions in emissions of CO2 from all affected sources. Commenters said EPA's proposal to 

base BSER on redispatch from coal to natural-gas fired units would directly contradict this 

requirement. Commenters said by basing its guidelines on an assumption that existing NGCC 

units will increase their utilization through redispatch, EPA has effectively proposed to require 

states to establish standards of performance that would allow-indeed, require-many affected 

sources to increase their CO2 emissions. Commenters said EPA's proposal to incorporate 

redispatch into the BSER on which states must base their standards of performance is in direct 

conflict with the CAA's requirement that performance standards ensure "continuous emission 

reduction."

Response 2: The 70% redispatch to NGCC is not part of the BSER determination for NGCC 

and thus the comment is misplaced. Moreover, the fact that on a mass basis emissions from 

certain sources increase in generally a possibility under and NSPS, which are generally set on a 

rate basis. 

Application of the BSER will lead to significant overall reductions of CO2 emissions. Also, as 

we note in section V. of the preamble, even if section 302(l) is interpreted together with section 

111, it does not affect our analysis in this rule, including our interpretation that the BSER 
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includes building blocks 2 and 3. Nevertheless, we disagree that the definition of a standard of 

performance under section 302(l) must be read together with the definition of a standard of 

performance under section 111(a)(1). “[W]here Congress includes particular language in one 

section of a statute but omits it in another..., it is generally presumed that Congress acts 

intentionally and purposefully in the disparate inclusion or exclusion.” Keene Corp. v. U.S., 508

U.S. 200, 208 (1993) (quoting Russello v. U.S., 464 U.S. 16, 23 (1983)); see also Bailey v. U.S., 

516 U.S. 137, 146 (1995). Moreover, we note that the definition in section 302(l) was added to 

the CAA in 1977 at the same time that Congress added “continuous” to section 111(a)(1). See 

Pub. L. 95-95, 91 Stat. at 770. However, in 1990, Congress revised section 111(a)(1) and 

restored the phrase “best system of emission reduction ” (removing “technological” and 

“continuous” but keeping considerations of “nonair quality health and environmental impact and 

energy requirements”). In contrast, Congress expressly used the phrase “best system of 

continuous emission reduction” for purposes of section 406 of the 1990 CAA Amendments. See 

Pub. L. 101-549, 104 Stat. at 2633 (defining a standard of performance for purposes of section 

406 of the 1990 CAA Amendments as “a standard which the Administrator determines is 

applicable to that source and which reflects the degree of emission reduction achievable through 

the application of the best system of continuous emission reduction which (taking into 

consideration the cost of achieving such emission reduction, and any nonair quality health and 

environmental impact and energy requirements) the Administrator determines has been 

adequately demonstrated for that category of sources.”). Thus, we disagree that the term 

“continuous” must be applied to section 111(a)(1). 

Comment 3: Commenters referenced this 2011 report by The National Petroleum Council 

(NPC) which states on page 27 that: "in some regions where there is substantial NGCC capacity, 

the capacity factors of the NGCC plants are quite low. This low utilization is a result of the 

relatively higher dispatch cost of NGCC units relative to existing coal-fired power plants (since 

coal prices tend to be lower than natural gas prices). The higher dispatch costs are partly due to 

existing regulations in which the units with the highest GHG emissions (coal units) are not 

penalized."

Commenters stated EPA's determination that existing NGCC units can and should assume the 

electric generation role of existing coal and oil units and are capable of sustaining 70 percent 

utilization rates was arbitrary and capricious. Commenters said in order to achieve its target 

emission rate, New Jersey's remaining coal-fired EGUs would need to be shut down. 

Commenters said EPA's assessment of the BSER, as applied to New Jersey, fails to adequately 

account for the substantial reliability risks created by over-dependence on any particular fuel 

source. Commenters said natural gas is historically subject to both price and supply volatility and 

EPA's mandated dispatch rates have the impermissible effect of imposing potentially unreliable 

electricity supply and unjustifiably high energy costs upon ratepayers.
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Commenters stated Building Block 2 must provide for a "glide path" for implementation that 

allows for a state to gradually achieve the ultimate NGCC capacity factor by 2030 because local 

natural gas delivery and transmission constraints may interfere with the capacity factors of 

NGCC units during the interim compliance period.

Response 3: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

EPA recognizes that each state has unique factual circumstances that will shape the development 

of a state’s plan. We look forward to working with the states to account for these factual 

circumstances in developing satisfactory state plans.

As discussed in section I.A of the final rule preamble, the interim compliance period has been 

adjusted to begin in 2022, we have provided states with flexibility with respect to the glide path, 

and “early” emissions reductions achieved between 2012 and 2022 can be accounted for in 

demonstrating compliance.

1.9.4.2: EPA authority

Comment 1: The following commenters say EPA doesn't have the authority to displace fuel 

generation.

Commenters stated EPA does not have the authority to require one generation source displaces 

another generation source as required by the CPP. Commenters said the CPP assumes as BSER 

the displacement of coal by other generation, the addition of renewable energy and demand side 

management programs (building blocks 2-3) which are not control technologies and should not 

be considered to establish the BSER.

Commenters stated EPA may be able to require a stationary source to emit less, but mandating 

that a stationary source operate less cannot be part of establishing an emissions standard. 

Commenters said previous rules have also been focused on emissions reductions, not operation 

reductions. Commenters said this is because forced retirements and down-dispatching are simply 

not contemplated or allowed for in the CAA. Commenters said the "slippery slope" potential of 

EPA being allowed to mandate reduced operations is staggering and could potentially be applied 

in every major rulemaking before the EPA.

Commenters stated forcing a coal-fired unit to operate less may drive down total CO2 emissions 

from the source, but it will likely increase the rate of emissions. Commenters said a coal-fired 

power plant, like other sources that generate CO2 through combustion, emits the lowest rate of 
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emissions at full operation. Commenters said requiring a coal-fired EGU to operate at less 

efficient reduced loads or requiring a coal-fired unit to repeatedly shut down and startup will 

likely increase the CO2 emissions rate from these units. Commenters said this contravenes the 

purpose and intent of Section 111(d), as well as the Rule Proposal itself. Commenters said in the 

same way that Section 111 does not provide EPA the authority to restrict the operation of source 

categories, it also does not allow EPA to choose winners or losers amongst fuel types. 

Commenters said EPA cannot regulate a generation technology out of existence, as proposed by 

EPA's Block 2's reduction of coal-fired generation. Commenters said this is a policy decision that 

EPA is not allowed to make, and conflicts with the intent of Congress. 

Commenters stated while EPA cannot mandate a decrease in operation within a source category, 

it also likewise cannot mandate an increase to a source category. Commenters said EPA is 

mandating an increase in the use of NGCC. Commenters said while this could potentially lower 

the emissions rate from NGCC units (due to similar gains in efficiency, as noted above), it would 

ultimately lead an increase in total emissions from NGCC. Commenters said this is a result at 

odds with the goals and purpose of the CAA. Commenters said mandating the retirement of coalfired EGUs without any explicit or implicit authority to do so constitutes an unlawful taking of 

utility's (and others) property. Commenters said this is because these retirements are being 

imposed long before the end of many of these unit's useful lives and subsequent to significant 

investments. 

Commenters stated they disagree EPA's attempt to reduce emissions from coal-fired EGUs by 

imposing significant reductions in the operation of these EGUs. Commenters said this is not 

allowed by the CAA. Commenters said with proper legal foundation, EPA may require a 

stationary source to emit less, but it cannot mandate a stationary source to operate less. 

Commenters said this is not allowed for, or contemplated in, the CAA and would be an extreme 

abuse of EPA's authority. Commenters said EPA's action would actually increase the rate of 

emissions from coal-fired EGUs by requiring more shutdowns and down-dispatched operation. 

Commenters said virtually every generation source that operates below its maximum operating 

level (e.g. a down dispatched coal-fired EGU), will operate more inefficiently, thereby increasing 

the rate of CO2 emissions.

Commenters stated in the NODA, EPA briefly discusses the concept of using a regional 

approach to the redispatch of coal generation to natural gas generation under Building Block 2. 

Commenters said EPA provides absolutely no specifics on how such a regional approach would 

work, what the regions would be, how the approach would impact individual state goals, or how 

regional NGCC resources would be allocated in the context of individual state compliance 

determinations. Commenters said they cannot meaningfully comment on the benefits or disbenefits of this concept. Commenters said because EPA lacks the authority to require redispatch, it is precluded from setting standards in any final rule utilizing this approach. 

Commenters stated EPA's lack of authority to order sources to shutdown partially or completely 

is fully consistent with Congress' charge to the Agency. Commenters said Congress has tasked 
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EPA with reducing emissions, not sources. Commenters said Congress had contemplated that 

EPA should attempt to reduce emissions by eliminating sources that produce those emissions 

(and so implicating the Takings Clause of the Fifth Amendment) it surely would have said so. 

Commenters continued if EPA had thought it had authority to reduce emissions by eliminating 

sources that produce those emissions, it surely would have exercised such authority, or at least 

considered exercising such authority, at some point since the passage of the 1970 CAA; 

however, there is no congressional indication that EPA is authorized to shut down emission 

sources in order to reduce emissions, and we have found no prior instance where EPA has 

considered using such authority as the means of compliance in any rulemaking. Commenters 

pointed towards EPA's words, "sources have shut down as a result of CAA regulations;" 

however, such shutdowns have only occurred in two instances not present here. Commenters 

said sources may choose to shut down because the cost of compliance with an emissions 

standard is uneconomic to the source. Commenters said such was the case on a fairly large scale 

when EPA issued its EGU MATs rule. Commenters said in these instances, the source's 

shutdown decision is an economic one because the prescribed means of compliance (usually 

pollution control equipment) is too expensive. Commenters said the source's choice is to pay to 

come into compliance, or cease operating to avoid the cost of compliance. Commenters said this 

is the first time that EPA offers no alternative to the source but to shutdown, partially or 

completely, as the sole means of compliance. 

Commenters stated EPA cites its power plant New Source Review settlements as evidence of its 

authority to compel plant shutdowns as the means of compliance under the CAA, but these 

settlements prove nothing. Commenters said as EPA notes, the settlements give sources the same 

choice they always have when faced with properly promulgated standards: control the source or 

retire it. Commenters concluded none of these settlements provide any authority for the 

proposition that EPA may mandate source shutdowns as the sole means of compliance with an 

emissions standard. Commenters continued EPA's reliance upon the fact that reduced generation 

"is one of the compliance options available to . . . EGUs to comply with the Clean Air Act acid 

rain program in CAA title IV, as well as the transport rules that we refer to as the NOx SIP Call 

and the Clean Air Interstate Rule (CAIR)" fails to acknowledge that a technology option was 

expressly available there. Commenters said under the Proposed Rule, coal-fired sources have no 

option to do anything but shutdown. Commenters said EPA's rule does not work at all unless 

coal sources shutdown, and neither increased energy efficiency, renewable generation, nor gas 

generation provide substantial carbon dioxide emissions reductions on their own. Commenters 

said the CO2 emission reductions come almost exclusively from coal unit shutdowns (complete 

or partial), and absent such shut downs, EPA's rule cannot achieve the CO2 reduction goals it 

seeks. Commenters said in contrast to all prior rulemakings, there is no control equipment choice 

that is provided in this rule to coal units so that they can choose from as an alternative to shutting 

down. 

Response 1: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 
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As discussed in section V.B., we are not basing the BSER on reduced utilization alone. We 

address reduced utilization in more detail in the Legal Memorandum.

As we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect 

an achievable emissions limit through the application of the BSER and do not in themselves 

require states or sources to implement the BSER. That is, EPA is responsible for determining the 

level of emission limitation from the source category, while states have the responsibility of 

assigning emission requirements to their sources that will ensure their achievement of that level 

of emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the BSER.

Comment 2: Commenters stated the set of circumstances EPA mistakenly cites as evidence of 

congressional recognition of its shutdown authority pertains to achievement of heath-based 

standards. Commenters said EPA first cites to section 110, where Congress acknowledged that, 

"in order to assure reductions in NAAQS pollutants to meet attainment requirements, [SIPs] may 

need to impose emission limits on industrial sources that those sources could meet only by 

retiring." Commenters said while it is not clear that the cited legislative history was not simply 

referencing circumstances where SIP limitations adopted for a source category were uneconomic 

for some sources to adopt, which is an acceptable basis for shutdown because the source has a 

choice between installing control equipment or shutting down, it is not meaningful evidence with 

respect to EPA's authority under section 111. Commenters said Section 110 is intended to require 

achievement of ambient air quality standards (NAAQS), and NAAQS are specifically healthbased standards, and consequently EPA and implementing States have been held to be generally 

obligated to take measures to meet those standards without regard to economics. Commenters 

said that is simply not the case with section 111, which, while not specifically a technologybased provision, is most decidedly not a health-based provision. Commenters said section 111 

contains an economic reasonableness provision, which does not exist as a basis for EPA's 

determination of the NAAQs or a State's promulgation of a SIP with respect to NAAQS. 

Commenters said EPA also cites the legislative history of old section 112, which required, as 

EPA observes, standards to be applied to sources of hazardous air pollutants to a level of 

stringency that provides an "ample margin of safety to protect the public health." Commenters 

added that in such circumstances, the statutory language itself compels the authority to shut 

down sources to meet the stringent heath-based standard, but again that has no bearing on section 

111 standards, which do not have a purely health-based focus. Commenters said as EPA 

observed when issuing section 111 standards for municipal solid waste landfills, "section 111 

standards deal with emissions of concern through establishing technology-based, not risk-based, 

standards." Commenters said it is also notable that Congress completely revamped old section 

112 in the 1990 amendments to the CAA to replace the exclusive health-based focus of section 

112 with a primarily technology-based focus in the form of MACT standards. Commenters 

continued despite reviewing precedent from over forty years of CAA history to support its 
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position that Congress envisioned the possibility of source shutdowns as the sole basis for 

issuing an emissions standard, all that EPA can come up with are statutory provisions that 

require that health-based pollution goals be met without regard to cost (and only when there is no 

alternative means of addressing the health-based concern through technology). Commenters said 

this health-based precedent confirms that Congress knew how to authorize EPA to shut down 

sources when it wanted to, and the fact that it has provided no indication of such authority for 

section 111 (or any other non-health-based standards), and indeed has included cost 

reasonableness standards in section 111, including remaining useful life considerations, is 

convincing evidence that no such authority has been granted. Commenters said further evidence 

that Congress carefully circumscribed EPA's authority to order source shutdowns to 

circumstances where health-based standards are implicated is also found in section 126. CAA 

section 126(c)(2) specifically authorizes EPA to order the shutdown of existing sources, but only 

after EPA has made a source-specific finding that the source or sources would contribute 

significantly to nonattainment, or interfere with maintenance of, applicable NAAQS. 

Commenters said this specific grant of shut-down authority and its careful limitation to 

circumstances where a violation of a health-based standard has been attributed to the offending 

source provide further evidence that Congress did not provide EPA with a broad grant of 

authority to order shutdowns in other non-health based circumstances. Commenters added 

section 303 of the CAA specifically grants EPA authority to shut down any pollution source 

provided EPA finds that the source presents an imminent and substantial danger to public health 

or welfare or the environment. Commenters summed that EPA also posits that new factors, such 

as the integration of the electric grid, provide it with new opportunities to consider source 

shutdowns that were not available before, but that is simply not the case. Commenters pointed 

out that in both CAIR and CSAPR, EPA could have, but did not, consider mandated source 

shutdowns as a possible basis for regulation.

Response 2: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

As discussed in section V.B., we are not basing the BSER on reduced utilization alone. We 

address reduced utilization in more detail in the Legal Memorandum.

As we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect 

an achievable emissions limit through the application of the BSER and do not in themselves 

require states or sources to implement the BSER. That is, EPA is responsible for determining the 

level of emission limitation from the source category, while states have the responsibility of 

assigning emission requirements to their sources that will ensure their achievement of that level 

of emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the BSER.
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Comment 3: Several commenters stated that EPA does not have the legal authority to force redispatch.

Commenters stated that building block 2 is impermissible, because it demands that coal-fired 

EGUs operate less instead of improve their emissions. Commenters said this approach shifts the 

burden of generating to units lacking common ownership and compatible contractual obligations, 

which belongs to RTOs, not EPA. Commenters said reduced utilization of a source is not BSER, 

and EPA has never promulgated a NSPS regulation requiring such action.

Commenters stated that RTO operations are based on agreements of system owners and 

operators, and are subject to oversight by FERC, but even FERC has no ability to compel any 

particular technique of coordination. Commenters said there are no provisions of state or federal 

law that have been identified that would allow EPA or the states to alter those arrangements and 

dictate a specific generation technique to achieve an arbitrary level of dispatch. Commenters 

supported specific excerpts from EEI's and UARG's comments pertaining to the operations and 

regulations of bulk electric system, including the potential limitations on natural gas supply. 

Commenters continued that even if a mechanism existed through which NGCC facilities could 

be required to dispatch at capacity factors in excess of their historic rates, no certainty exists that 

increased utilization of those units would offset higher CO2 emitting generation from existing 

facilities. Commenters said the transmission grid is still largely based on connecting local loads 

to nearby generating assets, and is constrained in its ability to transmit power in ways that EPA 

never studied. Commenters added the proposed rule ignores the realities of multi-state utilities 

whose generation is shared by retail and wholesale customers in multiple states, and it also 

ignores the fact that multiple RTOs have control over transmission systems within the same 

state.

Commenters stated the proposed rule creates a direct conflict with FERC's obligations under the 

FPA to ensure the reliable operation of the nation's electric system at rates that are just and 

reasonable, further reinforcing that Section 111(d) does not authorize the proposed rule. 

Commenters said the EPA's proposed "re-dispatch" of generation resources, i.e., "carbon 

dispatch," under building block 2 would directly conflict with FERC-approved tariffs utilizing a 

security constrained economic dispatch model, turning the current system on its head and 

potentially resulting in market disruptions. Commenters said the EPA's proposal is a complete 

restructuring of the FERC-approved energy markets, requiring resources to be dispatched based 

on a least-emission, rather than a least-cost, basis. As FERC Commissioner Moeller recently 

explained: "Building block two relates to increasing natural gas generation dispatch up to 70 

percent. Assuming this is even operationally possible, as noted in my testimony, this appears to 

be a fundamental shift from 'economic dispatch' to 'environmental dispatch' and has the potential 

to completely undermine the market principles that underpin dispatch of the system." 

Commenters said a state compliance plan that attempts to utilize building block 2's carbon 

dispatch approach to meet its emissions goal will require FERC's approval for any changes to the 

governing system tariffs and, in particular, will require FERC's approval for any changes to the 

dispatch algorithms. Commenters said the EPA acknowledges that its proposed carbon dispatch 
106

model will result in increased costs over the current security constrained economic dispatch 

model. Commenters said as a result of those increased costs-and for other reasons-it is entirely 

possible that FERC will determine that the EPA's carbon dispatch model is not just and 

reasonable, particularly if it "undermine[s] the market principles that underpin dispatch." 

Commenters referred to FERC Commissioner Clark has opined, "[t]o the degree an EPA rule 

directly attempts to change FERC jurisdictional market dispatch rules, there could be a clear 

conflict between the Federal Power Act and the Clean Air Act." Commenters said in the event of 

such a conflict, States and transmission system operators may not be able to utilize building 

block 2 to meet the EPA's emissions goals and therefore may not be able to comply with overall 

emission goals of the proposed rule. 

Commenters stated EPA does not consider the limitations on its own jurisdiction and the 

jurisdiction of the state agencies that will have to prepare plans to comply with any final rule 

stemming from the proposed rule. Commenters said this issue is particularly problematic in the 

context of Building Block 2. Commenters continued FERC, not EPA, has jurisdiction over, 

among other things, wholesale electricity markets, interstate transmission rates, natural gas 

pipeline siting and rates, and natural gas and electric sector coordination. Commenters said while 

FERC regulates the wholesale rates for electric utilities and market rules for regional 

transmission organizations, that authority has never been interpreted to allow FERC to dictate to 

those entities what generation units they should dispatch and when or how to do so. 

Response 3: We disagree with commenters. As we explain in sections V.A. and V.B. of the 

preamble, our emission guidelines simply reflect an achievable emissions limit through the 

application of the BSER and do not in themselves require states or sources to implement the 

BSER. That is, EPA is responsible for determining the level of emission limitation from the 

source category, while states have the responsibility of assigning emission requirements to their 

sources that will ensure their achievement of that level of emission limitation. States may fulfil 

their responsibility by establishing emission standards or creating plans consistent with the 

guidelines. In doing so, states will be able to choose from a wide range of emission reduction 

measures, including measures that are not part of the BSER. Additionally, we disagree with 

commenters that the final rule requires environmental dispatch. Instead, the potential to shift 

generation identified in building block 2 is consistent with the existing economic dispatch 

protocols. Environmental policies can shift generation in two ways. The first is operational 

restrictions, such as permit limits on the number of hours that an EGU can operate in order to 

limit emissions. The second is changes in the relative costs of generation among different types 

of affected EGUs related to pollution reduction measures. For example, a regulation that 

necessitates the use of a control technology that requires the application of a reagent in a certain 

kind of EGU will increase the variable cost of operating that plant, which in turn may reduce the 

amount of generation it is called upon to deliver to the grid through security-constrained 

economic dispatch procedures. This is consistent with economic dispatch.

Further, we disagree that we are expanding our authority to include wholesale energy market 

regulation. Our emission guidelines simply reflect an achievable emissions limit through the 
107

application of the BSER and do not in themselves require states or sources to implement the 

BSER. Moreover, these emission guidelines provide states with the flexibility to establish, 

implement, and enforce standards of performance and do not intrude on the regulatory domain of 

FERC or the states. It cannot be said that because environmental requirements may have an 

effect on the wholesale energy market that the EPA is therefore intruding into energy regulation. 

Certainly, in the legislative history of the 1970 CAA Amendments, Congress expressly identified 

power plants as a priority source category for regulation under CAA section 111.

Comment 4: Commenters stated that new NGCC could be considered as a basis for support for 

the BSER, but the proposal does not indicate how new NGCC can be incorporated. Commenters 

noted the BSER for Michigan in Building Block 2 is more stringent than the emission limit for a 

new NGCC in the Section 111(b) proposal. Commenters suggested the two proposals do not 

comport and should be aligned, because existing NGCC plants should be less stringent that the 

proposed Section 111(b) new source proposal, not more stringent.

Response 4: We address new NGCC units for purposes of the BSER in section V.A.2.

1.9.4.3: State-specific issues

Comment 1: The following commenters discuss complications for states to regulate dispatch.

Commenters stated absent from the proposed rule is any consideration of the ability of individual 

states to require redispatch to the extent contemplated by Building Block 2. Commenters said the 

Mississippi Public Service Commission (MPSC) is authorized by state law "to encourage and 

promote harmony between public utilities...and the environment." Commenters said the 

Commission has authority to regulate public utilities "[t]o foster the continued service of public 

utilities on a well-planned and coordinated basis that is consistent with the level of service 

needed for the protection of public health and safety and for the promotion of the general 

welfare." See Miss. Code Ann. Section 77-3-2(1)(f). Commenters said while the MPSC 

interprets its authority expansively, the MPSC, like most state regulatory commissions, has not 

exercised authority to order utilities under its jurisdiction to dispatch specific units in any 

specific order or manner. Commenters said those decisions have always been left to utilities with 

the relevant technical expertise. Commenters said while dispatch is addressed through RTOs, 

Mississippi is located only partially within an RTO (MISO). Commenters said the MPSC is 

uncertain whether it could control MISO's dispatch of generating units located in Mississippi. 

Commenters stated that the states that must ultimately develop the state plans to implement a 

final rule may or may not supply what authority EPA lacks, as EPA appears to at least recognize. 
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[24 below] Commenters continued, stating that the MPSC does not purport to predict the actions 

that the Mississippi legislature or the Governor may take in developing and enacting new 

legislation. Commenters noted, as a prudent regulator, the MPSC must make the conservative 

assumption that its authority and funding will remain unchanged until such time as the dulyelected government of Mississippi decides otherwise. Commenters observed that while the 

MPSC has broad statutory authority "to encourage and promote harmony between public 

utilities...and the environment" [25 Miss. Code. Ann. Section 77-3-2(1)(e).] and interprets its 

jurisdiction expansively, the implementation of Building Block 2, in particular, would require the 

MPSC to assert authority of an unprecedented scope over utility dispatch of resources on the 

grid, and this is not an area in which the MPSC has previously sought to dictate such specific 

results. And commenters stated it is unclear that the MPSC could dictate dispatch to MISO, 

which controls some of the resources in Mississippi. [24 See U.S. E.P.A. Office of Air & 

Radiation, Technical Support Document, State Plan Considerations 15-16, Docket No. EPA-HQOAR-2013-0602 (June 2014), available at www2.epa.gov/sites/production/files/2014-

06/documents/20140602tsd-state-plan-considerations.pdf ("[A]n enforceability consideration is 

whether an [integrated resource plan ("IRP")], and related public utility commission orders, must 

include additional requirements to implement certain actions, beyond denial of rate recovery or a 

change to utility tariffs if a utility fails to meet specified obligations in the IRP. If so, this may 

require state legislation to provide additional authority to state public utility commissions in 

some states, or confer additional authority to other agencies (e.g., a state environmental 

agency).")] Commenters stated neither FDEP nor the FPSC have authority over the dispatch of 

EGUs in Florida. Commenters said the FPSC only indirectly oversees the dispatch of investorowned (not municipal or cooperative) generating units through the "fuel and purchased power 

cost recovery clause" proceedings by which investor owned utilities obtain pass-through 

recovery of their fuel and purchased power costs. Commenters said legislative action would be 

required before this building block could be implemented on a state-wide basis.

Commenters stated EPA states the "reduced utilization in specified amounts" from specified 

EGUs can be achieved because a "reduction of, or limitation on, the amount of generation is 

already a well-established means of reducing emissions of pollutants in the electric sector." 

Commenters said EPA provides examples such as Title IV, NOx SIP call, and CAIR as systems 

of emission reductions that have been "adequately demonstrated." Commenters said EPA is 

suggesting states establish synthetic minor limitations or operational restrictions on coal-fired 

EGUs in order to force re-dispatch, presumably either through the authority of Title IV or Title V 

permits. Commenters said this suggestion is flawed on several different levels. Commenters said 

EPA cites the Title IV market-based program for the reduction of sulfur dioxide and nitrogen 

oxide emissions as an example of reducing emissions from a permit based program. Commenters 

said the Title IV provision was approved by Congress and did not include CO2. Commenters 

said EPA cannot assume that either states or EPA have similar authorities to regulate CO2 

emissions from power plants under Title IV, when none exist. Commenters said the Title V 

program cannot be used to "create" new emission limitations or force generating restrictions on a 

plant. Commenters said the only requirements that are to be included in the Title V permit are 

those that are included in the federally approved SIP. Commenters said besides the fact that this 
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suggestion lacks any legal foundation, it is also technically flawed. Commenters said states 

cannot force NGCC to operate at 70% or greater capacity. Commenters said EPA's suggestion 

could lead to this absurd result: A state requires an NGCC to operate at 70% capacity but finds 

itself below the annual capacity factor and must run even if there is no demand for the electricity 

thereby wasting natural gas and producing excess CO2 emissions. 

Response 1: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

EPA recognized that states may have to change state law to comply with the requirements to 

submit an approvable state plan. This was one of several reasons that the Agency provided in 

allowing states to ask for extensions beyond September 6, 2016. The available extension 

provides sufficient time for such changes. 

As we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect 

an achievable emissions limit through the application of the BSER and do not in themselves 

require states or sources to implement the BSER. That is, EPA is responsible for determining the 

level of emission limitation from the source category, while states have the responsibility of 

assigning emission requirements to their sources that will ensure their achievement of that level 

of emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the 

BSER.EPA recognizes that each state has unique factual circumstances that will shape the 

development of a state’s plan. We look forward to working with the states to account for these 

factual circumstances in developing satisfactory state plans.

Comment 2: Commenters stated the only "existing" NGCC generation in Kentucky is LG&E's 

and KU's Cane Run 7 unit, which is currently under construction to replace coal-fired resources 

retired as a result of the MATS regulations. Commenters said any other increased utilization 

from existing NGCC units would have to be imported into the state. Commenters said reliance 

on out-of-state generation is concerning given the competition for energy resources between 

generating states and other importing states (as contemplated under Building Block 2). 

Commenters said transmission planning must be completed across import and export seams 

between the Transmission Planning and Balancing Authorities to verify enough Available 

Transfer Capability (ATC) exists to facilitate firm transmission transactions. Commenters said 

without sufficient firm transmission contract paths, congestion and reliability concerns will be 

created and/or exacerbated and could require transmission line construction. Commenters said 

EPA should analyze and seek further information on potential reliability constraints from a 

generation and transmission line perspective prior to determining NGCC capacity and the 

appropriate NGCC re-dispatch capability. Commenters questioned the legality of including redispatch as a component of determining BSER. Commenters said if this component ultimately 
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survives legal scrutiny, they support allowing State Compliance Plans to utilize existing NGCC, 

CTs and New NGCC as an offset of existing coal-fired CO2 emissions.

Response 2: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

Also, we discuss substitute generation as a component of the BSER in more detail in the Legal 

Memorandum.

As we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect 

an achievable emissions limit through the application of the BSER and do not in themselves 

require states or sources to implement the BSER. That is, EPA is responsible for determining the 

level of emission limitation from the source category, while states have the responsibility of 

assigning emission requirements to their sources that will ensure their achievement of that level 

of emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the 

BSER.EPA recognizes that each state has unique factual circumstances that will shape the 

development of a state’s plan. We look forward to working with the states to account for these 

factual circumstances in developing satisfactory state plans.

1.9.4.4: Takings argument

Comment 1: Several commenters stated, the Proposed Guidelines violate the Fifth Amendment 

because uncompensated takings of property will result. 

- Commenters said, the Proposed Guidelines are unconstitutional because they will result in the 

taking of property without just compensation. Commenters said, EPA acknowledges that 

numerous coal- and oil-fired EGUs will need to shut down to comply with this rule, and many 

coal-fired EGUs that do remain open will have their operations so severely curtailed that it will 

result in a partial taking. 

- Commenters said, the premature retirement of coal- and oil-fired EGUs constitutes a total 

taking because it will completely deprive the owners of these EGUs of all economically 

beneficial use of their property. 

- Commenters said, the severe restriction in operations of coal- and oil-fired EGUs will also 

constitute a taking under the test set forth in Penn Central Transportation Co. v. City of New 

York, 438 U.S. 104, 124 (1978). Commenters said, the character of the Proposed Guidelines, 
111

their severe economic impacts, and their interference with reasonable investment-backed 

expectations all weigh in favor of finding a taking.

If Lawful, The Proposed Guidelines Would Violate the Fifth Amendment Because 

Uncompensated Takings of Property Will Result. 

Commenters stated, assuming arguendo that the Proposed Guidelines were consistent with the 

CAA and other federal statutes (which they are not), they would constitute an unconstitutional 

taking of property without just compensation. Commenters said, as EPA acknowledges, to meet 

the goals set forth in the Proposed Guidelines, numerous coal-fired EGUs throughout the country 

will need to be shut down. 79 Fed. Reg. at 34,933 (estimating retirement of 46-49 GW of coalfired EGUs and 16 GW of oil/gas steam EGUs under EPA's Building Block Option 1, and 

retirement of 24-32 GW of coal-fired EGUs and 3-5 GW of oil/gas steam EGUs under its Option 

2 approach); see also EPA, Goal Computation Technical Support Document (June 2014), Docket 

ID No. EPA-HQ-OAR-2013-0602-0460 ("Goal Computation TSD"); id. at App. 1, Docket ID 

No. EPA-HQ-OAR-2013-0602-0255. Commenters said, and for those coal-fired EGUs that do 

remain open, many will have their operations so severely curtailed that it will result in a partial 

taking. 

Commenters stated, the Fifth Amendment of the Constitution prohibits the taking of "private 

property . . . without just compensation." U.S. CONST. amend. V. Commenters said, the 

Supreme Court long ago extended the takings concept to regulation that goes too far: "The 

general rule . . . is that while property may be regulated to a certain extent, if regulation goes too 

far it will be recognized as a taking." Pa. Coal Co. v. Mahon, 260 U.S. 393, 415 (1922). 

Commenters said, a total, or per se, taking occurs where regulations "completely deprive an 

owner of "all economically beneficial use" of her property." Lingle v. Chevron U.S.A. Inc., 544 

U.S. 528, 538 (2005) (emphasis in original) (quoting Lucas v. S.C. Coastal Council, 505 U.S. 

1003, 1019 (1992)). Commenters said, partial takings, like total takings, must be compensated 

under the Fifth Amendment. Commenters said, courts evaluate partial takings claims by making 

"essentially ad hoc, factual inquiries" into three primary factors: (1) the character of the 

government action; (2) the economic impact of the regulation on the claimant; and (3) the extent 

to which the regulation interferes with distinct investment-backed expectations. Penn Cent., 438 

U.S. at 124. 

Commenters stated, the constitutional concept of "property" is broad enough to encompass the 

EGUs affected by the Proposed Guidelines, the generating capacity of those EGUs, and their 

remaining useful life (and corresponding future generating capacity). See United States v. Gen. 

Motors Corp., 323 U.S. 373, 378 (1945) ("[Property] deals with what lawyers term the 

individual's "interest" in the thing in question . . . . [T]he constitutional provision is addressed to 

every sort of interest the citizen may possess."); see also Kaiser Aetna v. United States, 444 U.S. 

164, 179 (1979) (stating that the government must give just compensation for taking "sufficiently 

important" "expectancies embodied in the concept of "property") (emphasis added). Commenters 

said, takings claims may be brought for the taking of real property, see Lucas, 505 U.S. at 1019, 
112

tangible property, see Andrus v. Allard, 444 U.S. 51, 65 (1979), and intangible property, see 

Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1003-04 (1984). Commenters said, the EGUs at 

issue here are, themselves, obviously tangible property, their generating capacity is intangible 

property, and the remaining useful life (and associated future generating capacity) of the EGUs 

represent investment-based expectations in the property, all of which are encompassed by the 

protections of the Fifth Amendment. Commenters said, the economic value of an EGU lies in the 

generation of electricity. Commenters said, thus, eliminating or curtailing the generating capacity 

or remaining useful life of an EGU, as the Proposed Guidelines would do, directly interferes with 

an owner's primary "interest" in the thing in question." Gen. Motors Corp., 323 U.S. at 378. 

Commenters said, accordingly, if the Proposed Guidelines are otherwise lawful - which they are 

not - their promulgation would require just compensation for all owners of EGUs that are forced 

to shut down or severely curtail operations because of EPA's regulatory action. 

Commenters stated, in sum, the Proposed Guidelines would result in a total taking of those coaland oil-fired EGUs that are required to shut down in order for the states in which they are located 

to meet the goals set forth in the Proposed Guidelines. Commenters said, and for those EGUs 

whose operation would be significantly curtailed as a result of the Proposed Guidelines, after 

examining the three Penn Central factors, it is clear that a partial taking would result. 

Commenters said, the impact of the Proposed Guidelines on these EGUs would be severe and 

that burden would be unfairly distributed by focusing exclusively on coal- and oil-fired EGUs. 

Commenters said, the Proposed Guidelines would also impose severe economic impacts on the 

owners of those EGUs and would significantly interfere with those owners' investment backed 

expectations. Commenters said, if EPA decides to proceed with the Proposed Guidelines and if 

those Guidelines could be lawfully promulgated, which for the many reasons presented in these 

comments they cannot, then EPA would have to justly compensate the owners of those EGUs 

that are forced to shut down or to restrict their operations significantly. Commenters said, 

otherwise, the owners of these EGUs will be forced "alone to bear public burdens which, in all 

fairness and justice, should be borne by the public as a whole." Tahoe-Sierra, 535 U.S. at 336 

(quoting Penn Cent., 438 U.S. at 123-24).

A. The Proposed Guidelines, if Lawful, Would Result in a Total Taking of Any EGU Forced To 

Shut Down To Ensure Compliance with the Guidelines. 

Commenters stated, EPA admits that the Proposed Guidelines will result in the forced retirement 

of coal- and oil-fired EGUs based on EPA-established state emission goals that can be met only 

by shifting generating capacity away from these EGUs to other sources of generation. 79 Fed. 

Reg. at 34,933; Goal Computation TSD, App. 1. Commenters said, if EPA were authorized to 

issue the Proposed Guidelines, the premature retirement of these EGUs would constitute a total 

taking because it would completely deprive the owners of these EGUs of all economically 

beneficial use of their property. See Lingle, 544 U.S. at 537. Commenters said, because EGUs 

will be required to shut down to meet the state goals set forth in the Proposed Guidelines, the 

owner of the EGU would lose its capital investment in the EGU, the generating capacity of the 

EGU, and the remaining useful life of the EGU (and its associated future generating capacity). 
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Commenters stated, although the Supreme Court has permitted the government, without 

compensation, to restrict lawful property from being put to unlawful uses, see Mugler v. Kansas, 

123 U.S. 623 (1887) (breweries banned under Prohibition Era law), or to restrict the use or sale 

of a previously legal product to the extent that it is nearly valueless, see Andrus v. Allard, 444 

U.S. 51 (1979), the Court has not allowed government appropriation of property without 

compensation where there is no showing that the property is a nuisance or creates an impending 

harm to others, see Mugler, 123 U.S. at 669 ("In the one case, a nuisance only is abated; in the 

other, unoffending property is taken away from an innocent owner."); cf. Lucas, 505 U.S. at 

1030. Commenters said, there is no nuisance or impending harm here. Commenters said, indeed, 

the EGUs that would be shut down under the Proposed Guidelines are heavily regulated facilities 

that operate subject to numerous permits, including Title V permits under the CAA. Commenters 

said, moreover, which EGUs would shut down has no relationship to the features of or 

environmental controls in place at the EGUs themselves. Commenters said, in fact, older, less 

environmentally-controlled EGUs may continue to operate while newer EGUs with state-of-theart environmental controls may shut down, simply by virtue of which state the EGU is located in 

and how much "excess" natural-gas fired, renewable, or other low carbon-emitting capacity the 

state possesses. Commenters said, in other words, factors that have nothing to do with the 

environmental characteristics of the EGUs themselves would determine which EGUs must shut 

down to comply with the rule. Commenters said, the shutting down of these EGUs under the 

Proposed Guidelines would result in a total loss of all economically beneficial use to their 

owners and thus constitute a total regulatory taking in the event that EPA's Proposed Guidelines 

were found otherwise to be lawful. 

B. The Proposed Guidelines, if Lawful, Would Result in a Partial Regulatory Taking of Any 

EGU That Must Significantly Curtail its Operation or Remaining Useful Life To Ensure 

Compliance with the Proposed Guidelines' Emission Goals. 

Commenters stated, under Building Blocks 2, 3, and 4 of the Proposed Guidelines, as reflected in 

the EPA state emission goals, many coal- and oil-fired EGUs that are not shut down entirely 

would experience serious curtailment of their operations as the Proposed Guidelines result in 

natural gas-fired generation being dispatched before coal- or oil-fired generation (Building Block 

2), increased use of renewable energy that will also be dispatched before coal- or oil-fired 

generation (Building Block 3), and the implementation of demand-side energy efficiency 

programs that are expected to result in less demand for electricity (Building Block 4). 

Commenters said, although these actions would not rise to the level of a total taking under Lucas, 

partial takings claims may be brought under Penn Central, which established a set of factors that 

courts consider to determine whether a regulation results in a compensable partial taking: (1) the 

character of the government action; (2) the economic impact of the regulation on the claimant; 

and (3) the extent to which the regulation interferes with distinct investment-backed 

expectations. Penn Cent., 438 U.S. at 124. Commenters said, the Penn Central factors are 

"designed to allow 'careful examination and weighing of all the relevant circumstances.'" TahoeSierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 322 (2002) (quoting 

Palazzolo v. Rhode Island, 533 U.S. 606, 636 (2001) (O'Connor, J., concurring)). Commenters 
114

said, the factors focus "directly upon the severity of the burden that government imposes upon 

private property rights." Lingle, 544 U.S. at 539. Commenters said, analysis of these three 

factors demonstrates that the Proposed Guidelines, if otherwise lawful, would result in a partial 

taking for coal- and oil-fired EGUs that would be forced to significantly curtail their operations 

as a result of the Proposed Guidelines. 

1. The Character of the Proposed Guidelines Weighs in Favor of a Takings Claim. 

Commenters stated, under the Takings Clause of the Fifth Amendment, courts look not to the 

effectiveness of the regulation or legitimacy of the public purpose, but instead to the magnitude 

or character of the burden a particular regulation imposes upon private property rights and how 

that regulatory burden is distributed among property owners. Lingle, 544 U.S. at 541. 

Commenters said, a regulation causes a taking where it forces "some people alone to bear public 

burdens which, in all fairness and justice, should be borne by the public as a whole." TahoeSierra, 535 U.S. at 336 (quoting Penn Cent., 438 U.S. at 123-24). Commenters said, where a 

regulation has a severe or an "unduly harsh impact upon the owner's use of the property," it 

weighs in favor of a takings claim. Penn Cent., 438 U.S. at 127; see also Lingle, 544 U.S. at 539. 

Commenters said, likewise, where a government regulation is of an "extraordinary" character 

and destroys "one of the most essential sticks in the bundle of rights that are commonly 

characterized as property," it weighs heavily toward a takings claim. See, e.g., Hodel v. Irving, 

481 U.S. 704, 716 (1987) (quoting Kaiser Aetna, 444 U.S. at 176). 

Commenters stated, for the owner of an EGU, one of the "most essential sticks" in the owner's 

bundle of property rights is the right to use the EGU for its lawful, economically beneficial, and 

only intended use: the generation of electricity. Commenters said, the Proposed Guidelines 

would require significant reductions in the operations of many coal- and oil-fired EGUs. 

Commenters said, in particular, reflecting EPA' Building Block 2, the EPA-required state 

emission goals would shift generation from coal-fired EGUs, which currently provide baseload 

generation, to NGCC units. Commenters said, requiring severe curtailments in the operation of 

an EGU would prevent the owner of that property from realizing its sole purpose - the generation 

and sale of electricity. 

Commenters stated, Penn Central is instructive here. Commenters said, in Penn Central, which 

involved regulations affecting Grand Central Station in New York City, the Supreme Court 

found that regulations restricting the ability to build above the train terminal in historic Grand 

Central Station in New York City did not interfere with owner "Penn Central's primary 

expectation" because it did "not interfere in any way with the present uses of the Terminal . . . . 

[A]ppellants may continue to use the property precisely as it has been used for the past 65 years." 

438 U.S. at 136. Commenters said, the Court further determined that the law "not only 

permit[ted] reasonable beneficial use of the landmark site but also afforded appellants 

opportunities further to enhance not only the Terminal site proper but also other properties" by 

permitting Penn Central to: (1) "profit from the Terminal but also to obtain a 'reasonable return' 

on its investment," (2) expand into the air space as long as the new construction "would 
115

harmonize . . . with [the Terminal]"; and (3) to transfer its "pre-existing air rights . . . to at least 

eight parcels in the vicinity of the Terminal." Id. at 136-38. 

Commenters stated, by contrast, the Proposed Guidelines would prevent the use of EGUs in 

accordance with their intended purpose. Commenters said, the severe curtailment of operation of 

an EGU would prevent it from generating electricity, which is its sole purpose. Commenters 

said, the Proposed Guidelines would destroy the value of these sources by confiscating their 

generating capacity and preventing the owners of these EGUs from obtaining a reasonable return 

on their investment. Commenters said, indeed, because many of the owners of these EGUs have 

obligations to provide electricity to their customers, the Proposed Guidelines would not only 

prevent the reasonable return on their investment but could require certain owners to build 

capacity to replace the severely curtailed operation of their existing coal-fired units or to 

purchase electricity from other electric generators on the open market to ensure that their 

customers' power remains on - even though the owner could provide such electricity to its 

customers from the affected EGUs if their operation was not restricted as a result of EPA's rule. 

Commenters stated, in sum, for those EGUs whose operation is severely restricted as a result of 

the Proposed Guidelines, EPA will have confiscated the "most essential sticks" in their bundle of 

property rights, assuming the Proposed Guidelines were otherwise lawful. Commenters said, the 

fact that these measures would be taken for the "public good" of reducing GHGs is of no 

relevance to the takings question. Commenters said, owners of certain coal- and oil-fired EGUs 

should not be forced to bear this societal burden alone. Commenters said, thus, the extraordinary 

character and severe impact of the Proposed Guidelines on those EGUs weigh heavily in favor of 

finding that a taking would occur if EPA were able to lawfully finalize its proposal. 

2. The Proposed Guidelines Would Cause Severe Economic Impacts. 

Commenters stated, the second factor in the Penn Central analysis focuses on the economic 

impact of the regulation. 438 U.S. at 124. Commenters said, the inquiry is whether the regulation 

"impair[s] the value or use of [the] property" according to the owner's general use of its property. 

PruneYard Shopping Ctr. v. Robins, 447 U.S. 74, 83 (1980); see also Penn Central, 438 U.S. at 

136-38. Commenters said, EPA admits that there would be significant economic impacts 

associated with the Proposed Guidelines. 79 Fed. Reg. at 34,935-36; EPA, Regulatory Impact 

Analysis for the Proposed Carbon Pollution Guidelines for Existing Power Plants and Emission 

Standards for Modified and Reconstructed Power Plants at ES-7 to ES-9 (June 2014), Docket ID 

No. EPA-HQ-OAR-2013-0602-0391 ("RIA"). Commenters said, for those coal- and oil-fired 

EGUs that would be forced to curtail their operations substantially, economic impacts would be 

severe. Commenters said, those EGUs would no longer be able to run at the capacity at which 

they were constructed to run. Commenters said, this would result not only in the generation of 

less electricity - and thus fewer profits - but also higher operating costs and inability to recover 

investments that were made in anticipation of continued operations. Commenters said, coal- and 

oil-fired EGUs are not designed to operate as peaking units, and the costs associated with doing 

so are significant. Commenters said, failing to operate these units fully results in their needing to 
116

burn more fuel per MWh generated (which perversely results in greater CO2 emissions). 

Commenters said, this "is not a case in which the Government is exercising its regulatory power 

in a manner that will cause an insubstantial devaluation of petitioners' private property," Kaiser 

Aetna, 444 U.S. at 180, but is instead a case where the government regulation would be 

"functionally equivalent" to a direct appropriation, Lingle, 544 U.S. at 539. Commenters said, 

both the value and the use of these EGUs as electric generating facilities would be significantly 

impaired by the Proposed Guidelines, and their owners would lose significant control over the 

manner of operation of their sources. Commenters said, these major economic impacts weigh 

heavily in favor of finding a taking assuming the Proposed Guidelines are otherwise lawful. 

3. The Proposed Guidelines Would Significantly Interfere With Reasonable Investment-Backed 

Expectations. 

Commenters stated, the Proposed Guidelines would interfere significantly with the reasonable 

investment-backed expectations of the owners of those coal- and oil-fired EGUs whose operation 

will be significantly restricted. See Penn Cent., 438 U.S. at 124 (establishing as a primary factor 

in a regulatory takings analysis the extent of interference with "distinct investment-backed 

expectations"); see also Palazzolo, 533 U.S. at 618 (adopting reasonableness requirement); Ark. 

Game & Fish Comm'n v. United States, 133 S. Ct. 511, 522 (2012) (adopting reasonableness 

requirement). Commenters said, although the Supreme Court has indicated that the extent to 

which an industry is regulated plays a role in evaluating the reasonableness of investment-backed 

expectations, see Monsanto, 467 U.S. at 1008-09, this does not mean that prior regulation of an 

industry per se forecloses the reasonableness of investment-backed expectations, cf. Palazzolo, 

533 U.S. at 633 ("Today's holding does not mean that the timing of the regulation's enactment 

relative to the acquisition of title is immaterial to the Penn Central analysis. Indeed, it would be 

just as much error to expunge this consideration from the takings inquiry as it would be to accord 

it exclusive significance.") (O'Connor, J., concurring); see also Tahoe-Sierra, 535 U.S. at 336 

("Accordingly, we have eschewed any set formula . . . . The outcome instead depends largely 

upon the particular circumstances in that case.") (internal quotation marks and citations omitted). 

Commenters said, as the Supreme Court has noted, whether a regulation has gone "too far" is 

instead " a question of degree" and therefore cannot be disposed of by general propositions." 

MacDonald v. Yolo Cnty., 477 U.S. 340, 348 (1986) (quoting Pa. Coal, 260 U.S. at 416). 

Commenters said, thus, the appropriate question for a regulated industry like the electric 

generation industry is the degree to which, when the affected sources were developed and 

constructed, the EGUs had a reasonable investment-backed expectation that they would be able 

to operate the source as the type of source it was designed to be and at a certain level of 

generating capacity in light of the existing regulatory climate, among other factors. 

Commenters stated, although this determination will require an "essentially ad hoc, factual 

inquir[y]," Penn Cent., 438 U.S. at 124, regarding how exactly the Proposed Guidelines would 

affect the EGU in question, the date that the investment decision was made for the EGU, and the 

laws and regulations existing at that time, the Proposed Guidelines, if valid, would lead to a 

number of strong takings claims by the owners of the coal- and oil-fired EGUs that are having 
117

their operations severely curtailed. Commenters said, the Proposed Guidelines would require 

drastic reductions in generating capacity for many sources. Commenters said, despite the fact 

that EGUs are heavily regulated, their owners had no reason to expect that their operations would 

be curtailed as a result of section 111(d) of the CAA. Commenters said, first, most, if not all, of 

the investment decisions for these EGUs were likely made before the Supreme Court decided 

Massachusetts v. EPA, 549 U.S. 497 (2007), and held that GHGs could be regulated under the 

CAA. Commenters said, prior to that time, EPA had not regulated GHGs under the Act and said 

it had no authority to do so. 68 Fed. Reg. 52,922, 52,925-29 (Sept. 8, 2003). Commenters said, 

furthermore, all of the investment decisions were made well before EPA proposed to adopt its 

novel "building blocks" approach of determining BSER, which it set forth for the first time in the 

Proposed Guidelines. Commenters said, nothing in EPA's prior rulemakings under section 111(d) 

- r indeed under section 111(b) - would give the owners of EGUs reason to anticipate that section 

111(d) would be used to require reduced utilization of a source. Commenters said, in sum, the 

owners of those coal- and oil-fired EGUs that would have significant restrictions placed on the 

operation of those EGUs as a result of the Proposed Guidelines had no reason to expect at the 

time that the investment decisions were made that this could occur. Commenters said, the owners 

instead constructed these EGUs with the reasonable investment-backed expectation that, 

although the sources would be subject to some regulation under the CAA and other statutes and 

regulations, the EGUs would operate for their remaining useful lives and at a certain level of 

generation and profitability.

Commenters stated "Because of its excessive overreach, the proposed rule also raises significant 

takings issues under the Fifth Amendment of the United State Constitution." Commenters stated 

"EPA's rule admits that achieving the proposed CO2 reduction goals will require the shutdown 

(or partial shutdown) of existing coal-fueled EGUs." Commenters continued, "Coal reserves 

owned by mining companies could also be rendered worthless." Commenters noted, "The Fifth 

Amendment prohibits the taking of 'private property . . . without just compensation.' and "as the 

Supreme Court has long observed, '[t]he general rule . . . is, that while property may be regulated 

to a certain extent, if regulation goes too far it will be recognized as a taking.'"[Penn. Coal Co. v. 

Mahon, 260 U.S. 393, 415 (1922).] Commenters stated "The constitutional concept of 'property' 

is broad enough to encompass the EGUs affected by the proposed rule and any coal reserves." 

[See United States v. Gen. Motors Corp., 323 U.S. 373, 378 (1945) ('[Property] deals with what 

lawyers term the individual's 'interest' in the thing in question . . . . [T]he Constitutional provision 

is addressed to every sort of interest the citizen may possess.").] Commenters noted that 

"Eliminating or restricting the generating capacity or remaining useful life of an EGU or coal 

mining operation would directly interfere with an owner's primary 'interest in the thing in 

question' and constitute a taking."

Commenters stated that the EPA Power Plan Violates Fifth Amendment Due Process and the 

Takings Clause by Threatening to Upset Well-Settled Investment-Backed Expectations 

Developed in Reliance on Long-Standing Federal Policy and by Singling Out a Few to Bear 

Burdens that in Fairness Should Be Borne by Society as a Whole. Commenters said the Proposed 

Rule represents a radical shift in federal policy that upsets settled, investment-backed 
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expectations, with no attempt by EPA to quantify the climate or environmental benefits from the 

Proposed Rule. Commenters said EPA Administrator Gina McCarthy testified before the Senate 

Environment and Public Works Committee on July 23, 2014: "The great thing about this [EPA 

Power Plan] proposal is that it really is an investment opportunity. This is not about pollution 

control." Commenters said the Regulatory Impact Analysis (RIA) for the Proposed Rule states 

that the impact of "reduced climate effects" has been "monetized" but not "quantified." 

Commenters said that, in other words, EPA does not claim that the Proposed Rule would affect 

the climate. Commenters said the mismatch and lack of social benefit distinguish the Proposed 

Rule from other actions by EPA under the Clean Air Act.

Commenters stated that the federal government has long encouraged responsible coal production, 

while being fully aware of the potential risks now cited by EPA. Commenters said in exchange, 

the federal government has profited enormously from coal and has received billions of dollars in 

royalties from its production. Commenters said royalty revenue collected by the U.S. Department 

of the Interior is an important part of both federal and state budgets. Commenters said under the 

Mineral Leasing Act of 1920, the federal government collects royalties on every ton of coal that 

is mined on federal lands. Commenters said the Department's Office of Natural Resources 

Revenue (ONRR) subsequently forwards approximately half of these royalty revenues to states, 

which in turn distribute the money toward road construction, schools, universities, communities 

affected by energy development and general funds. Commenters said states received nearly $2.1 

billion from oil, gas, coal and other energy royalties in FY2012, according to ONRR. 

Commenters said more than 460.3 million tons of coal mined on federal lands was sold in 

FY2012, with a total sales value of $8.1 billion. Commenters said this coal generated more than 

$875.8 million in royalty revenue. Commenters said the federal government collected more than 

$6.8 billion in royalties between FY2003 and FY2012. 

Commenters stated that the Fifth Amendment's Due Process and Takings Clauses aim "to 

prevent the government from forcing some people alone to bear public burdens which, in all 

fairness and justice, should be borne by the public as a whole." [Eastern Enters. v. Apfel, 524 

U.S. 498, 522- 23 (1998); see also Armstrong v. United States, 364 U.S. 40, 49 (1960).] 

Commenters said this is precisely the purpose of the Proposed Rule: forcing the United States' 

power plants and energy industry to bear the global burden of lessening CO2 emissions. 

Commenters said the Proposed Rule demonstrates the risk of allowing an unaccountable 

administrative agency to "make" law and attempt to impose the burden of global climate change 

on an unlucky and unfortunate few. Commenters said EPA's singling out of a mere handful of 

emitters and limiting (or curtailing) their property is exactly the type of overreaching the Fifth 

Amendment seeks to prevent. Commenters cited Justice Jackson: "The authority [vested by the 

Constitution in a federal branch] must be matched against words of the Fifth Amendment that 

'No person shall be ... deprived of life, liberty, or property, without due process of law.' ... One 

gives a governmental authority that reaches so far as there is law, the other gives a private right 

that authority shall go no farther. These signify about all there is of the principle that ours is a 

government of laws, not men, and that we submit ourselves to rulers only if under rules." 
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Commenters stated that because the Proposed Rule would reverse decades of federal policy after 

private industry has already committed to its investments, it operates in retroactive fashion to 

strand the very investments the federal government has encouraged and raises grave 

constitutional concern. [Penn Cent. Transp. Co. v. New York, 438 U.S. 104, 107 (1978), and 

Eastern Enters. v. Apfel, 524 U.S. 498, 522-23 (1998) (a regulation "may so frustrate distinct 

investment-backed expectations as to amount to a 'taking'").] Commenters said that the proposed 

rule is open to comment does not dispel or otherwise lessen the constitutional concern. [See 

Bentzion S. Turin, Eastern Philosophy: A Constitutional Argument for Full Stranded Cost 

Recovery by Deregulated Electric Utilities, 36 HOUS. L. REV. 1411, 1453 (Winter 1999) 

("Although it is certainly true that the government ... will often open its decision-making process 

for comment, in the final analysis, regulation by sovereignty proceeds unilaterally, with the 

government imposing its will on the regulated party, with or without the latter's consent.").]

Commenters stated that in Eastern Enters, a plurality of the Supreme Court distilled from prior 

case law three factors of "particular significance" to the Fifth Amendment inquiry: "the 

economic impact of the regulation, its interference with reasonable investment backed 

expectations, and the character of the governmental action." Commenters said the remaining 

Justices applied similar reasoning, although they would have framed the inquiry in terms of the 

Fifth Amendment's Due Process Clause rather than its Takings Clause. 

Commenters stated that EPA's Proposed Rule raises serious concerns under all three factors: 

first, the economic impact is severe. Commenters said the Proposed Rule is unquestionably 

designed to drastically cut and eventually eliminate the use of coal. Commenters said the 

economic impact of the rules on consumers, communities, and businesses that rely on coal would 

be substantial. Commenters said the impact would also be discriminatory. Commenters said it 

would fall harshly on the Midwestern United States and on other selected regions throughout the 

country, while largely bypassing the coastal areas. Commenters said the Proposed Rule would 

not affect Vermont and Washington, D.C. at all.

Commenters stated that the sheer depth of impact and harshness of the Proposed Rule is 

significant. [See Lingle v. Chevron U.S.A., Inc., 544 U.S. 528, 538 (2005) ("inquiry turns in 

large part ... upon the magnitude of a regulation's economic impact and the degree to which it 

interferes with legitimate property interests.").] Commenters said the unprecedented scope of the 

Proposed Rule raises Fifth Amendment "regulatory takings" concerns, in that "while property 

may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking." 

[Pa. Coal Co. v. Mahon, 260 U.S. 393, 415 (1922).]

Commenters stated that, second, the Proposed Rule would interfere with reasonable investmentbacked expectations. Commenters said to be sure, the federal government in the past has 

provided financial support to various kinds of energy sources. Commenters said the Proposed 

Rule is qualitatively different from previous policies. Commenters said that rather than simply 

encouraging alternative sources of energy, the EPA Power Plan is aimed squarely at stamping 

out coal.
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Commenters stated that the phase-out of coal use intended by the Proposed Rule would injure 

not only coal companies, but their employees, customers, and communities. Commenters said the 

Proposed Rule unduly penalizes them for following the government's past directive and 

encouragement to invest in coal. Commenters said this about-face in policy punishes those who 

relied upon the government, in the same way as the regulation held to be an impermissible taking 

in Ruckelshaus v. Monsanto, 467 U.S. 986 (1984) (finding a constitutional infringement when 

the government frustrated statutorily created expectations that trade secrets submitted to the 

government would be kept confidential). Commenters said Government policies shape business 

decisions and help determine the reasonableness of investment-backed expectations. [See 

Palazzolo v. Rhode Island, 533 U.S. 606, 618 (2001); Tahoe-Sierra Preservation Counsel Inc. v. 

Tahoe Regional Planning Agency, 122 S. Ct. 1465, (2002).] Commenters said here, the Proposed 

Rule represents a 180-degree turn in energy policy.

Commenters stated that, third, the Proposed Rule is highly discriminatory. Commenters said it 

forces a select set of victims - including coal-reliant consumers, communities, regions, 

businesses and utilities - to bear a substantial share of the economic burden for a worldwide 

public policy objective. Commenters said the stated objective of the Proposed Rule is global in 

nature. Commenters said forcing a narrowly selected set of victims to make the proposed 

reductions in CO2 emissions would have an imperceptible effect on worldwide greenhouse gas 

levels but at an inordinate cost to those of whom the most would be demanded.

Commenters stated that the Proposed Rule thus raises serious constitutional questions under the 

Fifth Amendment.

Commenters stated that EPA's interpretation raises grave questions under Article I and Article II. 

Commenters said the Proposed Rule hides political choices and frustrates accountability. 

Commenters said it forces states to adopt policies that will raise energy costs and prove deeply 

unpopular, while cloaking those policies in the garb of state "choice" - even though in fact the 

polices are compelled by EPA. Commenters said the Supreme Court has strongly condemned 

such arrangements, because "where the Federal Government directs the States to regulate, it may 

be state officials who will bear the brunt of public disapproval, while the federal officials who 

devised the regulatory program may remain insulated from the electoral ramifications of their 

decision." [New York v. United States, 505 U.S. at 169; see also Printz v. United States, 521 

U.S. at 923 (citing need for "accountability" as a reason to prohibit federal government from 

forcing state officials to implement federal policy).] Commenters said the EPA thumbs its nose 

at democratic principles by confusing the chain of decision-making between federal and state 

regulators to avoid political transparency and accountability.

Commenters stated EPA cannot require reduced utilization or shutdown of existing EGUs as a

"standard of performance" under section 111. Commenters said however, to the extent that the 

proposed guidelines would result in the shutdown or reduced utilization of an existing unit with 

remaining useful life, particularly those units that have made substantial investments to comply 

with other recent rulemakings from the Administrator, the proposal would constitute an unlawful 
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taking without just compensation, prohibited by the Fifth Amendment to the U.S. Constitution. 

Commenters said the economic value of an EGU lies in its ability to generate electricity. 

Commenters said the government must protect the investment-backed expectations that are 

embodied in the concept of "property," and provide just compensation if regulation goes so far as 

to rob citizens of the beneficial use of their property. (See Lingle v. Chevron USA, Inc., 544 U.S. 

528,537 (2005); Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1019 (1992)).

Commenters stated that many of the conservative measures proposed by EPA will make plants 

economically unsustainable. Commenters said many units owned and operated by NRECA's 

members would be prevented from operating with sufficient frequency to generate the revenues 

required to service their existing debt. Commenters said even if a unit were not altogether 

prohibited from operating during specified periods, it is likely that diminished productivity 

caused by EPA's definition of BSER would make it commercially infeasible to maintain a 

particular unit. Commenters said the result is a standard that not only disregards the "remaining 

useful life" of the unit, but also prescribes requirements that, by definition, are not achievable by 

many units. Commenters said courts consider three factors to determine whether a regulation 

constitutes a compensable governmental taking: (1) the economic impact of the regulation on the 

property owner; (2) the extent to which the regulation interferes with the property-owner's 

distinct investment-backed expectations; and (3) the character of the government's invasion of 

the property owner's property interest. See Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538-39 

(2005); Connolly v. Pension Benefit Guarantee Corporation, 475 U.S. 211, 224-25 (1986). 

Commenters said it is possible that the effects of the Proposed Rule are so severe that all three 

factors would support a finding that the proposed rule is a compensable taking. Commenters said 

the regulation could force many facility owners to shut down their plants altogether, leaving 

them with parcels of worthless land blighted by useless power plants and pollution-control 

equipment. Commenters said the Proposed Rule would also completely upset utilities' 

investment-backed expectations by denying them the use of their investments. Commenters said 

their member utility companies have each spent hundreds of millions of dollars on their facilities, 

making improvements and installing the latest pollution-control technologies. Commenters stated 

they have made these investments for the sole purpose of continuing to sell electricity in 

compliance with EPA rules that were promulgated pursuant to Section 112. Commenters said the 

Proposed Rule could make it impossible for a number of even the most modern, up-to-date 

facilities to continue doing business, squandering the money invested in these facilities, and this 

deprivation could be so severe as to be equivalent to a physical appropriation of the owners' 

property interests. Commenters said even if the land retains some of its residual value, hundreds 

of millions of dollars invested in the pollution controls and technological improvements will be 

rendered just as worthless as if they had been physically appropriated. Commenters said EPA 

should thus carefully consider the risk of takings liability the Proposed Rule might trigger.

The Proposed Rule's Allocation of Renewable Energy Credits Potentially Raises Constitutional 

Concerns Under the Fifth Amendment Takings Clause.
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Commenters stated, the Fifth Amendment to the Constitution states: "[N]or shall private property 

be taken for public use, without just compensation." Commenters said, that Clause is made 

applicable to the States by the Fourteenth Amendment. Commenters said, the Proposed Rule's 

approach of allowing states to use utility-owned renewable energy and renewable energy credits 

(RECs) to meet a state CO2 goal creates the potential for an unconstitutional taking of property 

without just compensation. Commenters said, specifically, it would allow "' for renewable energy 

measures, consistent with existing state RPS [Renewable Portfolio Standards] policies, a state' 

[to] take into account all of the CO2 emission reductions from renewable energy measures 

implemented by the state, whether they occur in the state or in other states'." 

Commenters stated, furthermore, by suggesting that a state with a renewable measure in place 

that causes renewable investment in another state has the right to claim those out-of-state 

renewables as a CO2 offset in its plan, the Proposal doubles down by reaching across state 

borders to confiscate renewable energy and RECs of utilities and developers. Commenters said, 

the state-driven portfolio approach is one which EPA identifies as a structure for states to use to 

develop their compliance plans. Commenters said, under such a plan, individual states must 

assume the responsibility for meeting their specific CO2 reduction goal established by EPA, 

which is based on the generation located within each state's borders. Commenters said, under the 

proposal, states are encouraged to use renewable energy as one of four building blocks to meet 

the compliance goal. Commenters said, indeed, on average, EPA relies on renewable energy for 

more than 30 percent of the CO2 reduction to be achieved. 

Commenters stated, while the Proposal touts flexibility and offers "options" to states in 

developing compliance plans, the fact is that it sets up a structure in which states are empowered 

to confiscate for their own regulatory goals renewable energy and RECs - which are the property 

of utilities and developers - and use them to satisfy their individual CO2 goal. Commenters said, 

under a state-driven portfolio approach, state plans which include renewable energy for 

compliance will open the door for states to simply count all the renewable energy generated in 

the state and the accompanying RECs to meet the compliance goal. Commenters said, as a result, 

the utility that owns the renewable energy/RECs will be prohibited from using those resources 

elsewhere because the Proposal expressly prohibits "double counting." Commenters said, this is 

especially true in states that have a renewable energy mandate that already requires Renewable 

Energy Credit (REC) retirement for compliance with that separate state goal. Commenters said, 

for example, in Minnesota, the state has imposed a Renewable Energy Standard (RES). 

Commenters said, it is served by a variety of fossil and renewable generation, both in-state and 

out-of-state, and by a variety of utilities based in and outside of Minnesota. Commenters said, 

however, Minnesota's CO2 goal is based on the generation located only in the state. Commenters 

said, the proposal allows Minnesota to structure its state plan to count toward compliance all of 

the RES RECs used in the state by out-of-state entities. Commenters said, this is problematic for 

an APPA member, MRES, a joint action agency that provides power to Minnesota public power 

utilities and has no generation contributing to the CO2 emissions located within the state. 

Commenters said, MRES does, however, provide RE to their member utilities based on the 

state's mandate. Commenters said, that RE and the associated RECs come from contracts 
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between MRES and wind developers, and has been bought and paid for by MRES members in 

not only Minnesota, but also Iowa, North Dakota, and South Dakota. Commenters said, 

furthermore, that RE is located in several states, including Minnesota, Iowa, and North Dakota. 

Commenters said, allowing the state of Minnesota to offset the emissions of its in-state EGUs 

with RE from a utility like MRES that does not even emit any CO2 in the state appears to 

constitute a taking of MRES property for a public purpose without any compensation. 

Commenters stated, while MRES may have an RES compliance obligation in Minnesota, that 

does not entitle EPA to authorize the state of Minnesota to take the RE paid for by MRES 

members and their customers (which has not been used to meet Minnesota's RES, i.e. excess 

RECs) to meet its state goal to offset the CO2 emitted by others. Commenters said, furthermore, 

if neighboring states such as Iowa and North Dakota where MRES has contracts for RE and 

RECs take a similar approach, the same renewable energy and RECs could be claimed by 

multiple states to meet their state compliance plan under EPA's flawed reasoning that a state 

policy that encourages the construction of renewables can claim credit for those renewables even 

if they are located out-of-state. Commenters said, this sets up disputes between states regarding 

which state's policy effectively induced the construction of the RE. Commenters said, under 

either case, this element of the Proposed Rule is appears to be unconstitutional taking of private 

property without compensation, in violation of the Fifth Amendment.

Response 1: The EPA’s response regarding regulatory takings under the Just Compensation 

Clause can be found in the Legal Memorandum accompanying the final rule. Additionally, to the 

extent commenters object to the portfolio approach, which the EPA is not finalizing, the 

comment is moot. Finally, commenters have not clearly articulated their theory for how 

regulation of air emissions under the Clean Air Act violates the due process rights of non-EGUs. 

Commenters cite Eastern Enterprises v. Apfel, 524 U.S. 498 (1998), a case in which a coal 

company argued that it should not be required to pay certain medical benefits to its former coal 

mine employees. But neither this rule nor CAA section 111(d) impose retroactive liability of the 

sort described in Eastern Enterprises, and they are rationally related to a legitimate government 

interest. See, e.g., Williamson v. Lee Optical of Okla., 348 U.S. 483 (1955).

1.9.5 Evaluation of Building Block 4, increased demand-side energy efficiency, against the 

BSER criteria

Comment 1: The following commenters generally agree with the inclusion of Building Block 4 

in the BSER.

Commenters stated reducing energy should be the most prominent strategy. 
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Commenters said states should embrace this opportunity to invest in energy efficiency programs 

that empower their ratepayers with tools that will lower their monthly bills by reducing energy 

consumption. 

Commenters stated since demand response provides so much benefit regarding carbon emissions 

reductions, the salient question is whether under applicable law EPA should clarify that demand 

response is included in Building Block 4 in the Final Rule. Commenters said since demand 

response satisfies all of the criteria for being a Best System of Emissions Reduction ("BSER") 

adequately demonstrated, which is the legal standard under the Clean Air Act and applicable 

case law, demand response should be included in EPA's Final Rule. Commenters said demand 

response meets all five of the criteria for the BSER set forth in EPA's Legal Memorandum based 

on the Clean Air Act and applicable case law; therefore, in order to promulgate the BSER for 

carbon emissions from fossil-fueled EGUs, EPA should clarify that demand response is included 

in Building Block 4. Commenters said as done with respect to energy efficiency in the Proposed 

Rule, EPA should calculate the carbon emissions from demand response based on feasible 

acceleration of demand response in each state for purposes of the Final Rule's determination of 

the state's required level of carbon emissions.

Commenters stated demand response is technically feasible, as it has been implemented by 

utilities through the country in various degrees for many years to protect the electricity system 

from brownouts and blackouts during times of peak demand. Commenters said the amount of 

emissions reductions that the system would generate is met by demand response. Commenters 

said the Navigant study highlighted this point and showed a 2% reduction from fossil fuel EGUs. 

Commenters said demand response has reasonable costs and that implementation of demand 

response on the national level would reduce the costs of electricity and stimulate the 

environment. Commenters referenced the PJM's recent annual electricity supply capacity auction 

as evidence of electricity cost reduction from demand response. Commenters said demand 

response can be an effective tool to promote the development and implementation of technology. 

Commenters said as utilities implement smart grid and automated metering infrastructure 

systems, demand response must evolve to be compatible with these systems. Commenters said it 

also facilitates the development and implementation of renewable energy and electricity storage 

technologies. Commenters said demand response has a positive impact on energy impact, since 

its used during peak demand and reduces the need for additional fossil fuel-fired plants.

Commenters stated Building Block 4 is legally and technically justified as an element of BSER. 

Commenters said like renewable energy, energy efficiency is a cost-effective system of emission 

reduction that is adequately demonstrated, as evidenced by the experience of states and utilities 

that have implemented these policies and programs for years. Commenters said EE also imposes 

minimal environmental costs and reduces overall energy requirements, and it is an appropriate 

element of BSER. 

Response 1: We appreciate these comments, however, as we explain in section V.B. of the 

preamble, the BSER does not include building block 4.
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Comment 2: The following commenters provide support to the adequate demonstration of 

Building Block 4.

Commenters stated that many states and utilities have already taken action to realize the 

enormous opportunity for consumer savings and climate protection. The commenters noted that 

twenty-six states around the country have adopted energy efficiency standards or targets for their 

utilities. The commenters reported that investment in consumer-funded EE programs has 

increased 28% in just three years and incremental electricity savings reported by the states 

reached 22 million MWh in 2012, equivalent to about 0.6% of retail sales. The commenters 

said a recent report by the Georgetown Climate Center contains numerous case studies of states 

and utilities that have successfully implemented EE programs to reduce greenhouse gas 

emissions and save customers money.

Commenters stated that EE is a proven resource with significant potential to dramatically reduce 

power plant emissions at low cost. The commenters said energy efficiency has been adequately 

demonstrated and that the savings are real because utilities, state regulators, independent system 

operators, businesses and energy service companies have relied on these investments to provide 

savings for customers and avoid the need for generation, transmission and distribution for more 

than 30 years. The commenters quoted a paper by the Harvard Law School Environmental Law 

Program arguing that energy efficiency constitutes an "adequately demonstrated" system of 

emission reduction: "Energy efficiency is ripe for inclusion as part of the "best system of 

emission reduction" for existing power plants because it is adequately demonstrated and costeffective, imposes minimal environmental costs, and reduces overall energy requirements." The 

commenters pointed out the goal of specific regions that have planned to continue EE measures, 

as implementing these measures decreases electricity demand and ensures reliability at 

reasonable costs.

Response 2: We appreciate these comments, however, as we explain in section V.B. of the 

preamble, the BSER does not include building block 4. We agree that there are significant 

potential reductions associated with EE and anticipate that many states will include them as a 

compliance measure.

Comment 3: Commenters stated that states and regions have gained much experience with EE 

programs, including measuring and evaluating energy savings. The commenters said there have 

been many protocols and partnerships developed that have matured during this time. The 

commenters noted that these efforts have led to programs and other initiatives to develop best 

practices and standardized protocols to help with implementing EE measures. 

Commenters stated that EPA has also developed a "Roadmap" to support the use of EE and 

provide tools for states on how to integrate renewable energy and EE programs into their SIPs. 
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The commenters said that states are currently pilot-testing this and building on emission 

reductions from renewable energy. The commenters also indicated that EPA is developing 

modeling tools to allow for detailed projections of power sector emission reductions resulting 

from EE and RE investments.

Response 3: We appreciate these comments. We agree that there are significant potential 

reductions associated with EE and anticipate that many states will include them as a compliance 

measure.

Comment 4: Commenters stated there is a potential for EE to have a large impact on avoided 

CO2 emissions. The commenters referred to a study by McKinsey & Company that evaluated EE 

options that would pay for themselves over time and found that total end-use energy 

consumption could be reduced by 23% by 2020. The commenters referred to another study by 

the National Academy of Sciences that indicated 25-30% energy savings is possible over the 

next 25-30 years with cost savings. The commenters said neither of these reports evaluated indepth options such as building retrofits or design.

Response 4: We appreciate these comments. We agree that there are significant potential 

reductions associated with EE and anticipate that many states will include them as a compliance 

measure.

Comment 5: Commenters stated that there are many policies, programs, and projects that 

sufficiently satisfy the legal requirements of Section 111(d) of the Clean Air Act were excluded 

from the determination of the BSER for building block 4.

Commenters stated EPA has readily recognized that energy efficiency is the most cost-effective 

resource to reduce emissions, but the block four formula falls well short of quantifying states' 

energy efficiency savings potential, overestimating the costs, and underestimating the benefits. 

Commenters said states could do more to increase efficiency deployment at lower costs than 

EPA's reduced energy targets. Commenters said the biggest missed opportunity in the approach 

is that it underestimates the potential for energy efficiency as well as renewable generation to 

reduce coal and gas plant pollution. Commenters said the Agency must address these issues in its 

final rule and adjust block four and the others accordingly.

Response 5: For the reason explained in section VA and VB of the preamble we are not 

including building block 4 as part of the BSER. We agree that there are significant potential 

reductions associated with EE and anticipate that many states will include them as a compliance 

measure.
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Comment 6: Commenters stated that EPA should adopt a consistent compliance approach 

requirement where the state that implements an energy efficiency measure will claim the 

resulting emission reductions in its state compliance plan. Commenters stated Oregon agreed that 

expanded energy efficiency measures provide an important and cost-effective component of the 

BSER and fully supports its inclusion in the BSER calculation. However, commenters stated, 

Oregon has significant concerns about the proposed approach for crediting energy efficiency in 

state compliance plans. In particular, the Proposal as described in the preamble presents 

insurmountable challenges for states like Oregon that are net importers of fossil generation yet 

are characterized in the EPA's BSER calculation as net exporters of electricity overall. 

Commenters stated under the proposed approach, Oregon would not be able to develop a costeffective compliance plan because the state would only be able to credit a small fraction of the 

investment in energy efficiency that can be tracked to fossil-fuel generation in the state. 

Commenters stated this would effectively render as unusable otherwise cost-effective 

investments in energy efficiency that were assumed in setting the BSER, and force Oregon to 

rely on much more expensive and potentially infeasible over-compliance with measures 

contemplated in the other three building blocks. Commenters stated it is of utmost importance 

that EPA allows Oregon to take credit for the full breadth of emission reductions resulting from 

energy efficiency investments in its state compliance plan. The commenters provided much 

detail on Oregon's EE and recommended that EPA should adopt a consistent compliance 

approach requirement where the state that implements energy efficiency measures will claim the 

resulting emission reductions in its state compliance plan. The commenters disagreed with the 

EE "track back" to the EGU compliance approach in the preamble. The commenters said they 

support the compliance approach outline in the State Plan Consideration TSD whereby the state 

that implements energy efficiency measures will claim the resulting emission reductions in its 

state compliance plan. 

Response 6: We appreciate these comments. We agree that there are significant potential 

reductions associated with EE and anticipate that many states will include them as a compliance 

measure.

Comment 7: The following commenters don't agree that EPA has the ability to regulate 

demand-side.

Commenters stated that Section 111 does not authorize EPA to extend its jurisdiction beyond 

stationary sources by attempting to regulate demand for a good, service, or product, as proposed 

in building block 4, which requires increases in end-user energy efficiency and other efforts to 

reduce demand for electricity. Commenters said building block 4 looks to derive emission 

reductions from something over which utilities have no control: efficiencies that might be gained 

through consumer efforts. Commenters said this would give EPA authority over all electricity 

usage, this expands EPA's authority beyond anything Congress ever intended to grant the 

Agency in the Clean Air Act. Commenters said the Supreme Court warned in UARG that such 

expansion cannot proceed without clear congressional authorization. Commenters added Section 
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111 authorizes EPA to regulate emissions of pollutants from existing units within an identified 

source category, not societal behavior in general.

Commenters stated that CAA Section 111 provides EPA with the authority to base a standard of 

performance on end-use efficiency or renewable energy, or other measures that reduce emissions 

primarily by reducing the demand for electricity from the affected fossil fuel-fired electric 

generating unit (EGU) and expanding deployment of either renewable energy-based electricity 

generation or of end-use efficiency, usually cited by EPA as "building blocks 3 and 4" (BB3, 

BB4). Commenters provided a number of comments and questions related to the data and 

methodology used by EPA in arriving at the emission reduction requirements implied by BB4. 

Commenters said for each of these issues regarding data or EPA's analytic methods, CURC 

believes that the statute requires EPA to identify how the issue was factored into the Agency's 

determination of BB3 and BB4, and where in the regulatory docket this rationale and supporting 

information are documented. 

Response 7: As we explain in section V.B. of the preamble, the BSER does not include building 

block 4.

Comment 8: Commenters stated EPA lacks legal authority under section 111(d) to determine 

BSER in whole or in part on the basis of emission reductions attainable through demand-side 

energy efficiency measures. Commenters said demand-side measures are by definition 

implemented and achieved outside of covered sources and the grid. Commenters said whatever 

role utilities play, energy efficiency savings are ultimately achieved through the planning, 

purchasing, building, operating, and financial activities of states, businesses, and the public at 

large.

Commenters stated concern that the threat of federal enforceability will make it more difficult for 

states to pass legislation authorizing energy efficiency programs. Commenters said such 

programs are a matter of state policy and regulatory decision-making, and the potential to lose 

control over these programs once incorporated into a state implementation plan submitted to 

EPA for approval provides an obstacle to moving forward on these programs. 

Response 8: The federal enforceability considerations raised in the comment arose primarily 

under the proposed portfolio approach for state plans. As explained in section VIII.C of the 

preamble, the EPA is not finalizing the portfolio approach, which would have allowed state plan 

submittals to include federally enforceable measures that apply to entities that are not affected 

EGUs. However, as further explained in section VIII.D, if the state is adopting the state measures 

type plan, the state plan submittal will need to specify, in the supporting materials, the state 

enforceable measures that the state is relying upon in conjunction with any federally enforceable 

emission standards for affected EGUs to meet the emission guidelines. The final rule provides 

considerable discretion to the states in setting emission standards and related plan requirements 

for its affected EGUs. Consistent with longstanding practice under the Clean Air Act, if a 
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regulated entity does not meet a requirement, the EPA will address the matter on a case-by-case 

basis, to determine the appropriate response and resolution.

Comment 9: Commenters stated given Florida's existing statutory framework, and EPA's failure 

to take this into account, its application of BSER in Florida is unlawful. Commenters said for 

Building Block 4, the FPSC periodically adopts DSM goals for electric utilities with annual sales 

over a certain threshold. See Section 366.80-366.85, F.S. Commenters said this includes 

Florida's five investor-owned utilities and two large municipal utilities, but no other municipal 

utilities or electric cooperatives. Commenters said legislative action would be required before 

DSM goals can be established for all electric utilities in Florida.

Commenters stated states must continue to have the freedom and flexibility to use their fullrange of energy resources in the most cost-effective manner and reduce demand in a costeffective manner. Commenters said Ohio EPA does not, nor has the authority, to implement 

federally enforceable state mandated EE programs. Commenters said while many stakeholders 

urged EPA to allow demand-side EE policies be a part of compliance options under the proposal 

for new sources, it was never the intent that it would be a component of BSER, resulting in a 

standard of performance for EE further lowering state goals. Commenters said regardless, EPA 

has proposed a "best practices" demand-side EE they believe represents a "feasible policy 

scenario", requiring "accelerated use of EE policies in all states consistent with a level of 

performance that has already been achieved or required by policies...of the leading states." 

Commenters said Ohio EPA wishes to point out that rushing states to develop and implement a 

demand-side EE program that meets EPA requirements to be quantifiable, non-duplicative, 

permanent, verifiable, and enforceable injects the federal government into an area that is under 

state purview. Commenters said states have had the ability for a number of years to incorporate 

demand-side EE reductions into SIPs under Section 110 but very few states have ever taken 

advantage of this opportunity due to requirements that make it incredibly challenging (Ohio 

expresses additional concerns regarding this implementation issue under the Compliance Plan 

comments below). Commenters said EPA acknowledges this component of BSER is "based upon 

the experience and success of states in developing and implementing energy efficiency policies 

that they undertake primarily for the purpose of providing economic benefits to electricity 

consumers in their state." Commenters said EPA is requiring all states to obtain additional 

reductions in CO2 emissions equivalent to those achieved by "the leading states" policies 

intended to aide consumers. Commenters stated leading states with demand-side EE programs 

that Ohio EPA is sure would not meet U.S. EPA's rigorous requirements to be quantifiable, nonduplicative, permanent, verifiable, and enforceable. Commenters said Ohio EPA anticipates 

typical EM&V (evaluation, measurement and validation) protocols often used for these programs 

would not be sufficient for EPA. Commenters said the target that has been set cannot be attained 

under these constraints. 

Commenters stated EPA improperly assumes that Wyoming can implement additional demandside EE, such that customers reduce energy use by as much as 12% by 2030 to offset coal-fueled 
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EGU generation. Commenters said EPA presumes to dictate "best practices" to states for energy 

conservation programs provisions, but, as with renewable energy, EPA neither has the expertise 

nor the authority to dictate to Wyoming what "best practices" are for adopting programs that 

conserve energy. Commenters said the Proposed Rule does not meet the statutory standard of 

showing that its EE projections have been "adequately demonstrated." Commenters said EPA 

projects that in 2030, electricity usage will be 10% below the business-as-usual case, and 

according to EPA, electric consumption in 2030 will be little more than it is today and will 

actually decline between 2020 and 2030. Commenters said according to the U.S. Census, 

population is expected to rise to 358,471,000 people by 2030, an increase of 37,108,000 from the 

projected 2015 level of 321,363,000, or an average of more than 2 million people per year. 

Commenters said EPA has not evaluated this issue relative to Wyoming. Commenters said EPA's 

proposal thus arbitrarily assumes that Wyoming's population and economy can grow, much less 

thrive, without electricity growth. Commenters said EPA's conclusion is unsubstantiated. 

Commenters said Wyoming ratepayers (including WIEC's members) have already invested in EE 

programs and renewable energy. Commenters said currently they would receive little credit for 

the beneficial impact that these investments may have. Commenters said allowing Wyoming to 

count pre-2020 emission reductions would recognize these contributions and would avoid 

sending a distorted signal to states to wait until 2020 to implement emission reductions. 

Commenters said the most reasonable approach to providing early action credit would be to 

allow any emission-reducing actions that take place after the baseline year to count toward 

compliance with state goals. Commenters said such emission reductions would not already be 

included in state goal calculations, so there would be no risk of double counting. Commenters 

suggested that EPA provide early action credit for at least those pre-2020 actions that states can 

demonstrate took place any time after the date of the Proposed Rule. 

Response 9: To the extent these comments address either building block 4 or the portfolio 

approach, they are moot, because the EPA is not finalizing those elements of the proposal. The 

federal enforceability considerations raised in the comment arose primarily under the proposed 

portfolio approach for state plans. As explained in section VIII.C of the preamble, the EPA is not 

finalizing the portfolio approach, which would have allowed state plan submittals to include 

federally enforceable measures that apply to entities that are not affected EGUs. However, as 

further explained in section VIII.D, if the state is adopting the state measures type plan, the state 

plan submittal will need to specify, in the supporting materials, the state enforceable measures 

that the state is relying upon in conjunction with any federally enforceable emission standards for 

affected EGUs to meet the emission guidelines. The existing guidance documents pertaining to 

enforceability include: (1) September 23, 1987 memorandum and accompanying implementing 

guidance, “Review of State Implementation Plans and Revisions for Enforceability and Legal 

Sufficiency;” (2) August 5, 2004 “Guidance on SIP Credits for Emission Reductions from 

Electric-Sector Energy Efficiency and Renewable Energy Measures;” and (3) July 2012 

“Roadmap for Incorporating Energy Efficiency/Renewable Energy Policies and Programs into 

State and Tribal Implementation Plans, Appendix F. The final rule provides considerable 

discretion to the states in setting emission standards and related plan requirements for its affected 

EGUs.
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EPA recognizes that each state has unique factual circumstances that will shape the development 

of a state’s plan. We look forward to working with the states to account for these factual 

circumstances in developing satisfactory state plans.

Comment 10: Commenters stated Building Block 4 encompasses reductions achieved through

end-use energy efficiency measures which have not been demonstrated in Kentucky anywhere 

close to the scale contemplated by EPA. Commenters said a study commissioned by the 

company and submitted to the Kentucky Public Service Commission indicates that LG&E's and 

KU's potential for implementation of energy efficiency measures is less than 25% of the level 

assumed by EPA.

Response 10: As discussed in section V.B. of the final rule preamble of the CPP, we are not 

including building block 4 as part of the BSER.

Comment 11: Commenters stated the purpose of the TS Power Plant is to provide a reliable 

source of electricity to Newmont's operations in rural Nevada, which require substantial amounts 

of electricity for processing equipment that cannot be cycled on and off based on power 

availability. Commenters said the intermittent nature of renewable energy is not consistent with 

these objectives and therefore Newmont does not rely on these sources of power. Commenters 

said grafting aggressive statewide renewable energy standards onto an emission limit applicable 

to the TS Power Plant is inappropriate. Commenters said EPA's assumptions for demand 

reduction through energy efficiency are not applicable to the TS Power Plant. Commenters said 

electricity is the largest expense for Newmont, after payroll, and therefore Newmont has every 

incentive to improve energy efficiency at its mines, but the 1.5% year-over-year annual 

electricity savings proposed for Building Block 4 is based on EPA's assessment of what utilities 

can achieve at the state-wide retail level, taking into account a broad range of energy efficiency 

measures. Commenters said this company is not structured like a regulated utility and does not 

sell power directly to a broad consumer base from which such energy savings can be gained. 

Commenters said it is unreasonable to require the TS Power Plant to comply with an emission 

limit that considers an outside-the-fence requirement that is inapplicable to its operations.

Response 11: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Also, as we explain in section V.B. of the preamble, the BSER does not include building block 4.

1.9.6 Other
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Comment 1: Commenters quoted EPA's statement signifying that the building blocks are 

severable should a court invalidate a particular building block, then the remaining building 

blocks would be the BSER. The quote continued by addressing that these state goals considering 

any combination of building blocks could be calculated by the resources provided. The 

commenters stated EPA should clarify its position on the aforementioned quote. The commenters 

agreed with EPA if the statement means that an emissions limit will be recalculated with the 

remaining building blocks and, as a result, the emissions limit will increase; however, they 

disagree and believe its unlawful if the statement means that the emissions limit is in essence 

fixed and will not change.

Response 1: We discuss severability in section VI of the preamble.

1.10 DETERMINATION OF THE BSER

1.10.1 Statutory and regulatory provisions related to determination and application of the 

BSER

Comment 1: Commenters stated, on the basis of these two facts - (1) it can show no single state 

that has ever "adequately demonstrated" its BSER and (2) actual implementation of this so called 

"system of control" would cost the nation up to $1.1 trillion over the course of the first 10 years 

of implementation - the Agency's only rational choice is to withdraw its proposed rule. 

Commenters said, should EPA choose to ignore the law and forge ahead, it must recognize that 

the Agency lacks the expertise and the authority to develop a coherent program that is based 

upon the four Building Blocks it describes. Commenters said, even a modest effort to repair this 

proposal would require the Agency to acknowledge and correct errors, change assumptions, 

jettison unrealistic deadlines, and revise flawed data. Commenters provided technical analysis of 

each of the four Building Blocks. Commenters said, while improvements can be made in any one 

of the four Blocks, commenters can envision no circumstances in which an effective, lawful, and 

consistent regulatory policy aimed at CO2 can be derived from the use of the current Blocks or 

even improved versions of the Blocks. Thus, commenters stated, their effort is designed to meet 

their obligation to their regulator to inform and correct wherever possible in the spirit of 

cooperation and constructive engagement, even when in fundamental disagreement.

Response 1: The EPA is not finalizing the portfolio approach to BSER in the manner in which it 

was proposed and is not finalizing proposed building block 4. The approach to BSER in the final 

rule is described in section V. of the preamble to the final rule. 
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Comment 2: Commenters said that the proposed rule is consistent with past practices in which 

the EPA establishes emission targets and states develop the compliance plan under section 111.

Response 2: We agree with these comments.

Comment 3: The statute gives EPA ample authority to oversee the determination of BSER for 

emission guidelines under section 111(d). 

Commenters said section 111(a)(1) and the definition of "standard of performance" elucidates 

that it is EPA, not the states, that identifies the best system of emission reduction considering the 

statutory factors. Commenters said that the definition specifically refers to "the Administrator" as 

the entity that "determines" what constitutes the best system of emission reduction based on the 

statutory factors such as optimal environmental performance ("best") and cost, and it is the 

Administrator who "tak[es] into account the cost of achieving such reduction and any nonair 

quality health and environmental impact and energy such reduction and any nonair quality health 

and environmental impact and energy requirements." Commenters said that definition is 

explicitly made applicable to the entirety of section 111, and the statutory criteria direct EPA's 

review of state plans.

Commenters said that EPA noted in its 1975 implementing regulations that section 111(d) is 

silent on the criteria by which state plans might be judged "satisfactory," and that therefore those 

criteria must be inferred from the context of section 111. See 40 Fed. Reg. at 53,342. 

Commenters said the criteria were located in section 111(a)(1)'s definition of "standard of 

performance," mirrored in EPA's definition of "emission guideline." Compare Pub. L. No. 91-

604, section 4(a), 84 Stat. 1676, 1683 (1970), with 40 Fed. Reg. at 53,346. Commenters said the 

agency suggested that the criteria for state plans served the same function as the criteria for 

standards of performance issued under section 111(b). 40 Fed. Reg. at 53,342 ("it seems clear 

that some substantive criterion was intended to govern not only the Administrator's promulgation 

of standards but also his review of State plans" (emphasis added)). Commenters concluded that 

EPA's emission guidelines have always been closely tied to the statutory definition of "standard 

of performance" in section 111(a)(1).

Commenters said exclusive state authority over the substance of existing source standards would 

be inconsistent with the language of section 111 and would be contrary to the purpose of the 

1970 Clean Air Act, "to provide for a more effective program to improve the quality of the 

Nation's air" because air quality could worsen if state plans were not subject to any enforceable 

substantive standards. Commenters said evidence of the central role for protective federal 

standard setting is found throughout the Clean Air Act, including in section 116, which prohibits 

the states from adopting or enforcing emission standards less stringent than those set by EPA. 

Commenters also stated that preserving the basic role for EPA in protecting the nation's air 

quality was a central theme of the regulations EPA adopted in 1975 to implement section 111(d). 

Commenters concluded that both the language of section 111 and the overall purpose of the 1970 
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Clean Air Act amendments require a strong substantive role for EPA in ensuring that standards 

for existing sources meet the statutory requirements.

Response 3: We agree with these comments.

Comment 4: Commenters argued that prior judicial interpretations of CAA section 111(d) 

indicate that EPA is not required to treat the states uniformly with regard to standards of 

performance. Commenters argued that, in fact, Section 111 encourages the EPA to adjust 

standards of performance on a state-by-state basis and gives states broad discretion and 

flexibility to design plans to meet EPA's regulations.

Commenters argued that the Clean Air Act prescribes a flexible standard for what will be 

"satisfactory" by taking into account both the present emission levels and the likely cost of any 

reduction.

Commenters argued that, while courts have held that uniform standards can be appropriate in 

certain cases and are not necessarily "arbitrary and capricious,", the D.C. Circuit has observed 

that "[t]here is no requirement in [the Clean Air Act] of uniformity of specific standards for all 

industries." Commenters stated, as one district court noted, the Clean Air Act "recognized that 

there cannot be a uniform treatment of all pollution sources, and the acts do not seek to achieve 

such. Nonuniformity is built in."

Commenters argued that section 111(d) was drafted to be intentionally flexible so as to allow the 

EPA and individual states to work together to reduce emissions in a cost effective way, and as 

reviewing courts have noted, forcing a single standard to be applied uniformly would defeat that 

purpose. For these reasons, commenters argued that EPA has the authority to decide whether to 

treat the states uniformly in regulating under the Clean Air Act and that its decision not to do so 

here will be given discretion by reviewing courts.

Response 4: We appreciate these comments. The final rule applies the applicable building 

blocks uniformly to steam EGUs and to combustion turbines within the three Interconnections, 

and establishes uniform source subcategory-specific emission performance rates for steam EGUs 

and for combustion turbines.

Comment 5: Section 111(d) Allows Flexible Approaches to Regulating Pollutants. 

Commenters stated, section 111(d) is a highly flexible section of the Act that can accommodate 

various approaches to emissions reductions, depending on the type of pollutant being regulated. 

Commenters said, for example, the rule regulating fluoride emissions from primary aluminum 

plants is highly specific and narrow because of the nature of the danger posed by fluoride 

emissions. Commenters said, on the other hand, the rule regulating NOx emissions from 
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municipal waste combustors (MWCs) allows states to use emissions averaging plans because the 

dangers posed by NOx from MWCs can be effectively reduced under such plans. 

Commenters stated, thus, prior section 111(d) rulemakings demonstrate the provision's flexibility 

and EPA's ability to apply the statute in ways that recognize the specific circumstances before 

the agency, including the nature of the emissions at issue, the harms at stake, and the sources to 

be regulated. Commenters said, EPA's Proposed Rule properly considers these factors, as well as 

the economic and environmental gains that will result from a flexible, broad-based rule. See 79 

Fed. Reg. at 34,833-34, 34,880-81 (discussing the diffuse, non-localized dangers of carbon 

pollution and the interconnected and diverse nature of the U.S. electricity sector).

Response 5: We agree with these comments.

Congress gave EPA the clear authority to determine the BSER.

Comment 6: EPA may determine the BSER

Commenters indicated that Congress gave EPA the clear authority to determine the BSER. 

Commenters noted that EPA is directed to evaluate whether state plans are "satisfactory," and 

that case law supports that courts will defer to agencies' assessment of what measures are 

"adequately demonstrated" provided the agency can demonstrate they are available. See, e.g., 

Portland Cement v. Ruckelshaus, 486 F.2d 375 (D. C. Cir. 1973).

Commenters provided an overview of BSER, noting that the same statutory definition of 

"standard of performance" applies to existing source standards under section 111(d) as applies to 

new source standards under section 111(b), including the phrase "best system of emissions 

reduction." Commenters noted that there are no court decisions providing further interpretation 

of the statutory term BSER in the 111(d) context, but there are cases evaluating how a standard 

of performance is to be set under section 111(b) for new sources, and those cases find that EPA 

has significant authority in selecting a BSER. Commenters said EPA does not have authority, 

however, to ignore older affected sources in the standard setting process if they are planned for 

retirement. Commenters noted that EPA's authority is not unbounded - the BSER must be 

"adequately demonstrated" and the [performance] standard itself "achievable." Nat'l Lime Ass'n 

v. EPA, 627 F.2d 416, 430 (D.C. Cir. 1980). 

Commenters noted that in the 1990 Clean Air Act Amendments, Congress repealed the 

requirement added to section 111(a)(1) in 1977 that the best system of emission reduction for 

new sources be "technological," going back to the original requirement enacted in 1970 that 

required the standard of performance to be based on the application of the "best system of 

emission reduction," which must take into account costs, non-air quality health and 

environmental impacts, and energy requirements, and must be adequately demonstrated. Pub. L. 

No. 101-549, sec. 403, 104 Stat. 2399 (1990). Commenters concluded that the "best system of 

emission reduction" is not limited to technological controls implemented directly at the affected 
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sources, and the commenters argued that the BSER allows for reliance on a "system" that may 

include measures to decrease emissions by reducing the utilization of those sources, so long as 

EPA adequately considers the required statutory factors. 

Response 6: These comments are generally supportive of this rule and we appreciate them. We 

agree that in promulgating a standard of performance for existing sources pursuant to CAA 

section 111(d)(2) that the Administrator is required to take into consideration, among other 

factors, the remaining useful lives of sources in the source category to which a standard of 

performance applies. On the other hand, pursuant to CAA section 111(d)(1), states have the 

discretion to consider, among other factors, the remaining useful life of an existing source to 

which a standard of performance is being applied.

Comment 7: Congress and the Supreme Court recognize EPA's authority to establish binding 

emission guidelines that reflect BSER and reflects EPA's longstanding interpretation of section 

111(d). 

Commenters indicated that EPA has authority to establish binding emission guidelines that 

identify the "best system of emission reduction" and the resulting emissions reductions that each 

state plan must achieve. Commenters stated that while Congress did not detail the process by 

which EPA would evaluate and approve state plans, there is considerable evidence that Congress 

subsequently recognized and approved the guidelines process that EPA established in its 1975 

regulations. Commenters said, in 1977, when Congress modified the definition of "standard of 

performance," the House committee explained that under Section 111(d) "[t]he Administrator 

would establish guidelines as to what the best system for each . . . category of existing sources 

is." 85: H.R. Rep. No. 95-294, at 195 (1977). Commenters said, in 1990, in Section 129 of the 

Clean Air Act, Congress directed EPA to adopt standards for solid waste combustion that would 

mirror the Section 111 process, expressly referring to the "guidelines (under section 7411(d) of 

this title . . .)." 42 U.S.C. section 7429(a)(1)(A). Commenters provided further analysis of the 

section 129 language and concluded that section 129 expressly mandates that EPA's role in 

undertaking joint 111(d)/129 regulatory action is to establish emission limitations for solid waste 

incineration units whereas the state's role is to establish a plan to implement those emission 

limitations, and that this division of regulatory authority is the same as the division established 

by EPA's 1975 implementing regulations for 111(d). Commenters said both the 1977 and 1990 

amendments demonstrate that Congress has recognized and legislated in reliance upon EPA's 

guidelines process under Section 111(d).

Commenters noted that the EPA regulations for the general implementation of section 111(d) 

have not been challenged since they were promulgated in 1975 nor in the specific and recent 

application of the regulations to power plants in the Clean Air Mercury rule. Commenters 

concluded that EPA's authority to issue emission guidelines is settled.
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Commenters also noted that the Supreme Court recognized that states issue Section 111(d) 

standards "in compliance with [EPA] guidelines and subject to federal oversight." Am. Elec. 

Power Co. v. Connecticut, 131 S. Ct. 2527, 2537-38 (2011).

Response 7: These comments are supportive of this rule and we generally agree with them. 

Support for a Broad Definition of BSER and the building block Approach to BSER.

Comment 8: Several commenters agreed with the EPA's interpretation that the phrase "best 

system of emission reduction" in section 111(d) allows the approaches in building blocks 2, 3, 

and 4. 

Commenters believed that it was "not merely permissible for EPA to rely on such system-wide 

pollution reduction methods; rather, a rule that ignored these available reduction methods could 

not be defended as the "best system of emission reduction." 

Commenters argued that additional support for a system-based approach is found in Section 

111(d)'s adoption by reference of a "procedure similar to that provided by section [110]" of the 

CAA. 42 USC Section 7411(d). Commenters noted that Section 110 allows for use of systembased measures including "economic incentives such as fees, marketable permits, and auctions of 

emissions rights." 42 USC Section 7410(a)(2)(A). Commenters argued that through its reference 

to section 110, Congress indicated that these system-based measures may also be used under 

Section 111(d). Commenters believed the reference to Section 110 means that section 111(d) 

provides a hybrid approach to emissions reduction based on proposed emissions reduction at the 

source, as contemplated by Section 111(b), but also extreme flexibility and state autonomy in 

selecting such reductions as contemplated for states meeting the NAAQS limits as required by 

Section 110. However, commenters were also concerned that despite the apparent overall 

flexibility of the proposed rule, the technical support documents and the proposal seem to forbid 

the possibility of true flexibility by noting that emissions reductions must come from the 

"affected units."

Response 8: We appreciate these comments.

Comment 9: Commenters argued that under the doctrine of Chevron review, EPA's authority to 

interpret statutory provisions is constrained, both by the text of the statute determined by 

"applying the ordinary tools of statutory construction," and by the reasonableness of the 

Agency's interpretation. Commenters argued that applying those tools of construction here 

indicates that EPA's interpretation of "system of emission reduction" to include measures beyond 

affected EGUs is not consistent with the plain language of section 111.
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Commenters argued that EPA's primary interpretation of BSER appears to be that, for an 

interconnected system such as the electric power system, "system of emission reduction" may 

include any measure that impacts the system and that may reduce emissions at affected EGUs. 

Commenters noted that the EPA's interpretation relies on a broad reading of the term "system" 

and a reading of the word "system" from the Oxford English Dictionary as "a set of things 

working together as parts of a mechanism or interconnecting network." According to the EPA, 

commenters argued, so long as the system identified is interconnected, any measures within that 

system that affect EGU emissions - including ones outside the control of the owners of 

individual regulated facilities - can be considered part of BSER, but this is inconsistent with the 

language of the CAA. 

Commenters argued that in order to achieve its extreme emission goals, EPA's Proposal seeks to 

impose compliance obligations on entities other than the sources within the listed source 

category, and nothing in section 111 or the CAA authorizes EPA to target for regulation an 

undefined class of "affected entities." Commenters noted, on the contrary, only sources that fall 

within a listed source category are subject to section 111 controls, and the CAA does not 

authorize EPA to pursue aggregate emission reductions from a designated source category 

through standards of performance.

Response 9: We disagree with this comment. For the reasons discussed in section V.A. and V.B. 

of the preamble and in the Legal Memorandum, our interpretation of the BSER is reasonable in 

light of the statutory text, statutory context, statutory purpose, and legislative history. 

Broad Definition of BSER and the Congressional Intent of Section 111 of the CAA 

Comment 10: Commenters stated, the legislative history supports Congress's intent to allow

EPA broad authority to define a combination of emission reduction opportunities beyond a 

specific technology installation at a power plant. Commenters said, the 1970 statutory language 

defined a "standard of performance" for both new and existing sources as "a standard for 

emissions of air pollutants which reflects the degree of emission limitation achievable through 

the application of the best system of emission reduction which (taking into account the cost of 

achieving such reduction) the Administrator determines has been adequately demonstrated." 

Commenters said, in the 1977 revisions, Congress added "technology" to the definition to require 

standards for new sources to reflect "the best technological system of continuous emission 

reduction" while the language for existing source was amended to require the "best system of 

continuous emission reduction," which, as clarified by the Conference Report, did not need to be 

a technological system." Commenters said, however, in 1990, Congress removed the 

requirements that standards for new sources be based on "technological" systems restoring use of 

broad "system" language for both new and existing source standards. Commenters said, these 

revisions make clear that EPA is not required to impose a system based on a particular 

technology. Commenters said, rather, BSER can reflect the best system of emission reduction 

opportunities for the source category, as EPA reflects in this proposed rule.
139

Response 10: We appreciate these comments.

Broad Definition of BSER and the Plain Language of Section 111 of the CAA

Comment 11: Multiple commenters argued that the plain language of section 111 of the CAA 

supports the idea that the BSER should be applied to individual sources and not to entities 

beyond the control of the source.

Commenters argued that the EPA has authority to require emission reductions that can be 

achieved only from measures applied inside the fence line, and not from other sources or from 

other source categories. Commenters suggested, therefore, building blocks two through four 

cannot be part of BSER, and Section 111(d) provides the EPA with only the narrow authority to 

set emission standards based solely on emission reductions that can be achieved inside the fence 

line and under the control of the EGU. Commenters asserted that Congress did not authorize 

EPA to enact beyond the fenceline requirements such as those found in Building Blocks 2, 3 and 

4.

Commenters noted that aside from EPA's proposed building block 1, the measures in blocks 2 to 

4 fall outside the scope of EPA's authority under the Clean Air Act. Commenters argued that, in 

the 40-year history of the Section 111 performance-standards program, the agency has always 

formulated Section 111 standards based on "inside-the-fence" measures that are cost-effective 

and that can be undertaken at the regulated facility itself, such as installing pollution controls. 

Commenters said, however, for controlling carbon dioxide emission from coal generators, the 

EPA has conceded that the only feasible inside-the-fence measure for reducing coal-plant 

carbon dioxide emissions is improving the efficiency of the combustion process, so the EPA has 

now sought to include other measures outside the control of the facility, because even under 

EPA's aggressive assumptions as to the efficiency gains existing generators can hypothetically 

make, the result is only a six percent reduction in carbon dioxide emissions, which is far short of 

the President's carbon goals. Commenters argued that that EPA's beyond-the-fence-line 

approach is unlawful-is shared by 18 states. Commenters argued that the proposal, offered as a 

way of providing "flexibility," does not conform to the limitations Congress has placed on EPA 

in the CAA and EPA lacks statutory authority and is limited by its own regulations to issue 

emission guidelines seeking reductions of CO2 emissions from coal-based EGUs based on 

something other than an adequately demonstrated reduction system for such EGUs.

Response 11: We disagree with this comment. For the reasons discussed in section V.A. and 

V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is 

reasonable in light of the statutory text, statutory context, statutory purpose, and legislative 

history.
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Comment 12: Commenters argued that EPA can only establish standards of performance for 

existing sources under Section 111(d) after it makes a determination that the source category 

"causes, or contributes significantly to, air pollution which may reasonably be anticipated to 

endanger public health or welfare" and then establishes standards of performance for new 

sources in that source category. 42 U.S.C. section 7411(b), (d). Commenters argued that here, 

EPA has neither made an endangerment determination nor established standards of performance 

under Section 111(b) for any of the entities that it seeks to regulate through a beyond the fence 

line approach. Commenters said, thus, by basing its BSER analysis on actions that can only be 

accomplished by these entities, EPA is effectively incorporating them into the regulated source 

category. Commenters argued that as EPA recognizes, opportunities to reduce CO2 emissions at 

existing coal-fired EGUs are limited, and regulatory obligations must be imposed on other 

entities in order to achieve the proposed emission reduction targets. Commenters stated, thus, by 

expanding its BSER analysis beyond the fence line and authorizing a "portfolio approach" for 

compliance, EPA's proposal would ensure that sources other than fossil fuel-fired EGUs can -

and almost certainly will - be subject to legally enforceable compliance obligations. 

Commenters argued that the broader context of the Clean Air Act suggests that EPA's authority 

to create subcategories of sources under Section 111 is a one-way ratchet, and there is no 

corresponding authority in the text of Section 111 that permits EPA to aggregate diverse classes 

of sources into mega-categories for purposes of regulation. Commenters noted that the EPA has 

already created subcategories of EGUs under other regulations within section 111 (e.g., for coal 

and natural gas-fired units). Commenters argued that as a result, even EPA's proposal to conduct 

a single BSER analysis for all fossil fuel-fired EGUs is unlawful.

Response 12: The EPA is not finalizing the portfolio approach to BSER in the manner in which 

it was proposed and is not finalizing proposed building block 4. The approach to BSER in the 

final rule is described in section V. of the preamble to the final rule. The EPA's rationale for the 

applicability to the final rule to fossil fuel fired EGUs is discussed in section IV.D of the 

preamble to the final rule. 

Comment 13: Commenters said, while no court has interpreted the definition of "standard of 

performance" in the context of Section 111(d), several cases have addressed standards of 

performance under Section 111(b). Commenters stated that under Section 111, EPA may "look[] 

toward what may fairly be projected for the regulated future, rather than the state of the art at 

present," but these projections are necessarily constrained by the effective date by which the 

performance standards go into effect. Portland Cement Ass'n v. Ruckelshaus, 486 F.2d 375, 391-

92 (D.C. Cir. 1973). Commenters said, thus, standards of performance may not be based on 

emission control technologies that are "purely theoretical or experimental," Essex Chem. Corp. v. 

Ruckelshaus, 486 F.2d 427, 433 (D.C. Cir. 1973), 486 F.2d at 434, nor "based on a "crystal ball" 

inquiry." Portland Cement Ass'n, 486 F.2d at 391; see Costle, 657 F.2d at 362 (emission limit 

could not be achievable based on test data from "non-lime/limestone processes" because they 

"are not widely available").
141

Commenters stated that in the proposed rule, EPA applies a BSER analysis that looks beyond the 

fence line of the fossil fuel-fired unit and that this "Building Block" approach is unlawful and 

contrary both to the plain meaning of Section 111 and the broader context of the Clean Air Act, 

which require a BSER analysis that is focused solely on the existing source that is subject to 

regulation under Section 111(d). Commenters said, further, EPA cannot salvage its approach 

through an alternative BSER analysis that replaces the beyond the fence line emission reductions 

with mandatory reductions in coal-fired electricity generation.

Commenters stated, in prior Section 111(d) rulemakings, EPA has consistently taken the position 

that BSER analyses and the ensuing emission guidelines must be applied in a source-based 

manner that focuses on individual sources that can be retrofitted with pollution control 

technology. Commenters said, for example, EPA asserted that some systems of emission 

reduction may be excluded under Section 111(d) because "physical limitations may make 

installation of particular control systems impossible or unreasonably expensive." Id. at 53,344. 

Commenters said, EPA also contrasted "the cost of controlling existing facilities" with "those for 

controlling new sources." Id. at 53,341. Commenters said, finally, EPA explained that "the 

degree of control reflected in EPA's emission guidelines will take into account the costs of 

retrofitting existing sources." Id. at 53,341. Commenters said, nowhere in that rulemaking does 

EPA suggest that its emissions guidelines could be based on emission reductions undertaken by 

unrelated third parties or through reduced operation of affected facilities. Commenters provided 

examples from the emission guidelines for sulfuric acid plants, phosphate fertilizer plants, kraft 

pulp mills, primary aluminum plants, and municipal solid waste landfills where EPA has relied 

exclusively on systems for emission reduction that can be implemented onsite by each existing 

source subject to the regulation. 

Commenters stated that EPA fails to provide a reasoned basis for changing its interpretation, and 

cited Jicarilla Apache Nation v. Dep't of the Interior, 613 F.3d 1112, 1119 (D.C. Cir. 2010). 

Regarding the three reasons EPA provides for expanding its BSER analysis to include Building 

Blocks 2, 3, and 4, commenters said EPA is arguing that it can expand its BSER analysis to look 

beyond the fence line of individual facilities because doing so will result in greater reductions of 

CO2 emissions than a source-based approach alone could achieve. Commenters said even if that 

were true, these results-oriented reasons offer no insight as to why such an approach is legally 

permissible under Section 111(d). 

Response 13: We disagree with this comment. For the reasons discussed in section V.A. and 

V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is 

reasonable in light of the statutory text, statutory context, statutory purpose, and legislative 

history.

Broad Definition of BSER and EPA's Prior Regulation of Specific Source Categories Under 

Section 111 
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Comment 14: Commenters noted that over the past four decades, EPA has interpreted "system 

of emission reduction" to cover only measures that are within the control of owners at affected 

facilities. Commenters argued that it has done so for over 85 categories and subcategories of 

sources regulated under section 111. See 40 C.F.R. part 60. Commenters argued that in these 

rulemakings, a system of emission reduction has meant a system put in place at an affected 

facility that reduces emissions from that facility. Commenters argued that, pursuant to section 

111(b), EPA has interpreted this same phrase over 85 times, including as part of numerous 

regulations concerning this same source category of EGUs. 

Commenters argued that section 111(d) itself has been rarely used, leaving little significant 

regulatory precedent regarding its scope, but even so, this is the first time the EPA has 

determined BSER to include measures affecting utilization or demand for electricity that occur 

outside the fence-line of regulated units in the relevant source category. Commenters argued that 

those few guidelines have focused on source level controls by respecting states authority to 

establish stricter emission limits, to change compliance plan dates upon a required 

demonstration, and have allowed "designated facilities" to petition for longer or different 

schedules if the unit will be upgraded or emissions have been decreased to an appropriate level.

Commenters argued that previously enacted emissions guidelines under Section 111(d) have 

been technology-based standards applied to specific source categories. See, e.g., 40 C.F.R. Part 

60, Subpart Cb (Large municipal waste combustors), Subpart Cc (Municipal solid waste 

landfills), Subpart Cd (sulfuric acid production units), Subpart Ce (Hospital waste incinerators); 

these emission guidelines allow physical or operational changes made to comply with the rule to 

be exempt from NSR or NSPS. Commenters argued that these existing source guidelines 

conform to traditional NSPS regulations and do not include the significant state plan 

requirements that EPA is proposing in the CPP and suggested that this is further evidence that 

the proposed standard is not authorized by Section 111(d).

Commenters noted that the primary justification that EPA provides for this novel approach for 

existing sources relies on the "interconnected nature of the electric system," but argued that new 

sources will be part of the same inter-connected system, and noted that the EPA did not even 

evaluate a system-wide approach for new sources. See 79 Fed. Reg. at 1,430. Commenters noted, 

in addition, EPA published a proposal to establish standards of performance for modified and 

reconstructed EGUs concurrently with this proposed rule, also under section 111(b), and did 

little more than mention a Building Block approach to BSER for modified and reconstructed 

units without giving it any substantive consideration. Commenters said, yet, the proposed 

guidelines contain no argument that there is something unique about section 111(d) or about 

existing sources that necessitate or distinguish the term "system of emission reduction" in such a 

way as to support EPA's divergent approaches. Commenters stated, to the contrary, "best system 

of emission reduction" has the same meaning under both section 111(b) and section 111(d), 

although the system that is "best" may differ for new and existing sources.

Commenters argued that this "sudden and unexplained change" may be arbitrary, capricious or 

an abuse of discretion." Commenters argued that the EPA must justify its departure from past 
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and concurrent interpretive practice and explain why adopting different interpretations of "best 

system of emission reduction" simultaneously is not arbitrary and unreasonable. 

Response 14: We disagree with this comment. For the reasons discussed in section V.A. and 

V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is 

reasonable in light of the statutory text, statutory context, statutory purpose, and legislative 

history.

Comment 15: Commenters argued that this source-based approach continues to the present, with 

the exception of the proposed EGU guidelines. Commenters cited a separate proposed NSPS 

rulemaking on June 30, 2014, in which EPA reaffirmed that section 111 standards of 

performance "apply to sources" and must be "based on the BSER achievable at that source." 

Response 15: We disagree with this comment. For the reasons discussed in section V.A. and 

V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is 

reasonable in light of the statutory text, statutory context, statutory purpose, and legislative 

history.

Comment 16: Commenters argued that numerous past and recent examples from EPA's NSPS 

and emissions guideline rule making, and the EPA's established process for developing those 

rules, support the concept that the BSER should be a technology or measure that can be applied 

at the source itself, rather than a broad definition of system that EPA has adopted in the proposed 

EGU guidelines. 

Commenters noted that in a 1989 Federal Register notice, EPA described the process of 

developing emissions guidelines for existing sources as the product of a series of decisions 

related to certain key elements for the source category that are consistently focused on narrowly 

defined sources of emissions, sometimes at the process or process unit level, and the 

identification of controls and emission limits, monitoring requirements, performance test 

methods and compliance procedures, and reporting and recordkeeping requirements, that can be 

applied to those sources. 

Commenters noted that EPA has routinely repeated its understanding that a "system of emission 

reduction" (for purposes of determining BSER) is a technology and cited several examples:

2005: "As with any NSPS analysis, EPA evaluated the controls that effect the best emission 

reduction of the pollutant in question." 

2008: "[S]tandards of performance promulgated under section 111 are based on 'the best system 

of emission reductions' which generally equates to some type of control technology."
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2012: "NSPS are based on the effectiveness of one or more specific technological systems of 

emissions control, unless certain conditions are met." 

Commenters argued that EPA has continued to construe BSER in the traditional fashion, and 

cited examples from the July 2014, proposed revisions to its NSPS for grain elevators in which 

EPA looked at "control techniques" such as "application of mineral oil as a dust suppression 

technique," but identified "[n]o other [new] emission control technologies or work practices." 

Commenters noted that in the preamble to EPA's proposed NSPS for GHG emissions from new 

electric utility generating units, EPA commented that it has "frequently referred to [BSER] as the 

'best demonstrated technology' (BDT)." Commenters agreed and stated that EPA has

traditionally explained the process by which it crafts emission guidelines as one in which it first 

defines the specific kind of apparatus to which the guidelines will apply, identifies the "best 

demonstrated technology" for that apparatus, and then develops guidelines based on the 

performance of that "best demonstrated technology."

Commenters argued that in its rulemaking to establish NSPS for GHG emissions from EGUs, 

EPA commented that BSER is "generally, but not required to be always, a technological 

control." Commenters noted that EPA quoted the legislative history for the 1977 CAA 

Amendments, which described Congress's adoption of the BSER requirement in 1970 as "the 

first time [Congress] imposed a requirement for specified levels of control technology." 

Commenters said EPA took the position that the definition of "standard of performance" "makes 

clear that the standard of performance must be based on controls that constitute "the best system 

of emission reduction ... adequately demonstrated" (BSER)." Commenters stated, ultimately, 

after "consider[ing] three alternative control technology configurations as potentially 

representing the BSER," EPA proposed that "efficient generating technology implementing 

partial [carbon capture and storage] is the BSER adequately demonstrated for [new fossil fuelfired boiler and IGCC EGUs]." 

Response 16: We disagree with this comment. For the reasons discussed in section V.A. and 

V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is 

reasonable in light of the statutory text, statutory context, statutory purpose, and legislative 

history.

Miscellaneous Comments

Comment 17: Commenters suggested that a source-based set of emission reduction guidelines 

can achieve significant emission reductions in a legally robust manner, especially when 

combined with voluntary State programs for incorporating activities that avoid additional 

emissions. Commenters argued that this is important because EPA and the states do not have 

legal authority to go beyond the source to define BSER. Commenters argued that GHG reduction 

opportunities that may be available outside the fence line lie outside the source's control, and the 

means do not yet exist to consistently evaluate and measure emissions reductions due to these
145

activities, nor to transfer credit for those reductions efficiently to sources so they can meet their 

compliance obligations. 

Response 17: We disagree with this comment for the reasons described in the preamble.

Broad Definition of BSER and its Implementation in State or Federal Implementation 

Plans

Comment 18: Commenters argued that since the definition of BSER is contained in the 

definition of "standard of performance" that is shared between sections 111(b) and 111(d), the 

proposed BSER implemented through 111(d) could also be applied to 111(b) actions. 

Commenters said this would remove states from their lead role in the deployment of generation 

and conservation resources and could make these matters subject to citizen lawsuits under the 

CAA.

Response 18: We discuss the applicability of the BSER for this section 111(d) rule to new 

sources in the Legal Memorandum.

1.10.2 The interconnected nature of the U.S. electricity sector

Comment 1: Commenters supported the EPA’s decision to take into account the integrated 

nature of the electricity grid when setting BSER.

Commenters supported the EPA’s decision to take into account the integrated nature of the grid 

when determining BSER. Commenters gave the following reasons for supporting this approach: 

1. Experience in various states and regions (e.g., the RGGI region) shows low or zero 

emitting electricity generation sources do displace generation from high emitting EGUs. 

2. Interconnected nature of the grid allows implementation of cost effective reduction 

measures that can reduce and/or displace the generation of higher emitting sources.

3. Interconnectedness and diversity of the grid provides unique opportunities for costeffective emissions reductions while ensuring demand and reliability needs of consumers 

are met. 

4. Represents a commonsense response to the fact that affected sources can reduce 

emissions cost-effectively (through a wide variety of means) by reducing generation as 

low-emitting sources and energy efficiency satisfy the demand for electricity services.
146

5. RE and EE programs have been used by states to comply with other EPA rules (e.g., 

1998 NOx SIP Call Rule, CAIR, etc).

Response 1: We agree with these comments. We note, however, that as discussed in section 

V.B. of the final rule preamble of the CPP, we are not including building block 4 as part of the 

BSER.

Comment 2: The interconnected nature of the power sector has been recognized and harnessed 

by Congress, EPA, and individual states when designing pollution control programs under the 

Clean Air Act 

Commenters stated, as EPA effectively describes in the preamble and legal TSDthe unique 

features of the Clean Power Plan arise from - indeed, are driven by - the distinctive 

characteristics of carbon pollution from the power sector. Commenters said other source 

categories for which EPA has issued performance standards under section 111, including the five 

source categories which are subject to section 111(d) standards, are characterized by functionally 

independent facilities that emit pollutants with primarily local or regional effects. Commenters 

stated, for such source categories, EPA has appropriately issued performance standards that 

reflect the application of cleaner processes, technologies, or techniques to emissions from 

individual sources. Commenters said this approach responds to the need to protect local and 

regional air quality from emissions associated with such sources, and is well-suited to sectors in 

which standardized technologies and practices are available to reduce pollution from individual 

sources.

Commenters stated, the characteristics of carbon pollution from the power sector, by contrast, 

call for the distinctive regulatory approach reflected in the Clean Power Plan - an approach that, 

as they argue elsewhere in these comments, also fits comfortably within the broad language of 

section 111; comports with other Clean Air Act regulatory programs affecting the power sector; 

and reflects policies that utilities and states around the country are already employing to reduce 

carbon pollution. Commenters stated, unlike other industrial sectors regulated under section 

111(b) and (d), the power sector does not consist of functionally independent facilities - rather, it 

consists of an interconnected network of facilities that operate as a continuously-balanced and 

centrally-coordinated machine, or system. Commenters said key distinguishing features of this 

system include:

1. Real-time balancing of supply and demand via centralized dispatch. Commenters stated, 

due to the lack of large-scale electricity storage facilities, the electric grid has always 

required continuous matching of electricity supply and demand - a process that is carried 

out in practice by balancing authorities or system operators that centrally manage the 

resources on the grid. Commenters stated, depending on the region, these functions can 

be carried out by vertically integrated utilities, RTOs/ISOs, transmission operators, or 

other entities. Commenters said these entities continuously "dispatch" available 
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generating resources (and in many cases, demand-side resources as well) to meet demand 

in a cost-effective way and ensure reliability, either through a real-time energy market or 

other centralized method of ordering and coordinating power supply from the various 

resources on the grid. Commenters stated, through these mechanisms, the portfolio of 

generating resources that serves the grid changes from hour to hour in response to 

changes in cost, reliability considerations, environmental constraints, and other dynamic 

factors. Commenters said producing electricity on the interconnected grid also means that 

other basic aspects of a generator's operations are determined by the needs of the grid; for 

instance, generators must produce electricity at the same nominal frequency in 

synchronization. 

2. Fungible and commingled product. Commenters stated, although electric generating 

resources do have diverse operating characteristics that influence the rate and timing of 

their output, the generation from any given EGU can be seamlessly substituted with that 

of any other - and is thoroughly commingled with generation from all other sources 

connected to the grid. Commenters said this makes electricity one of the most thoroughly 

fungible of industrial products. Commenters noted, from a supply standpoint, this 

fungibility is reflected in the fact that utilities and grid operators routinely and 

continuously coordinate output from different resources to optimize the availability and 

cost of power. Commenters noted another unique result is that utilities whose 

transmission networks are connected by "tie lines" buy power from one another to satisfy 

demand; for instance, companies buy electricity when it is cheaper to procure than 

generate or when their generation resources cannot satisfy demand alone. (As is 

described further below, the vast majority of the power generation sources in the country 

are interconnected on two massive grids.) Moreover, commenters stated, due to the 

commingling of power on the grid, minute-to-minute changes in the composition of the 

electric generating portfolio take place in a way that is largely invisible to the consumer. 

Commenters said, indeed, even if a consumer preferred power from a particular source, it 

would be impossible for the generator or power system operators to direct the energy

from a particular generator to a particular user. Commenters said energy flowing onto the 

power grid energizes the entire grid, and consumers draw undifferentiated energy from 

the grid. 

3. Substitutability of demand and supply. Commenters stated, related to the fungibility of 

electricity is the extent to which reduction in electricity demand serves as a substitute for 

supply. Commenters stated, thanks to an array of cost-effective energy efficiency and 

demand response technologies, there are a large number of ways in which consumers can 

use less electricity while maintaining the same (or greater) level of utility or "electricity 

services." Commenters noted, from the standpoint of the interconnected power system, 

which is continuously balanced at every moment in time, such demand-side measures are 

effectively equivalent to supply resources: every megawatt in demand reduction 

translates automatically and immediately into a megawatt reduction in needed supply. 

Commenters said this phenomenon is most vividly illustrated in the energy and capacity 
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markets operated by regional transmission operators and independent system operators, 

many of which allow demand response and/or energy efficiency to compete directly with 

generation to meet energy and capacity needs. Commenters said it is also illustrated in 

the extensive modeling that EPA and others have undertaken to quantify the effects of 

energy efficiency programs and measures on hourly dispatch and overall emissions from 

the power sector. Commenters noted, there are few, if any other products where a 

reduction in demand leads automatically to changes in output and supply; a refinery, for 

example, might respond to local changes in demand for gasoline by exporting a greater 

share of its products or storing product in anticipation of future demand. Commenters 

said such responses are generally unavailable to electric generating units.

4. Dispersed nature of carbon pollution. Commenters stated, carbon dioxide is a globally 

dispersed pollutant whose harmful effects on our atmosphere are virtually identical 

regardless of where it is emitted. Commenters stated, accordingly, the climate benefits of 

mitigating carbon pollution depend entirely on the aggregate level of reductions from the 

power sector, rather than the distribution of those reductions.

5. Lack of source-specific control technologies. Commenters stated, due to the limited 

readily-available technologies that can be implemented at individual fossil fuel-fired 

EGUs to mitigate carbon pollution, states and power companies that have sought to 

decrease carbon pollution in recent years have almost exclusively relied on system-based 

approaches that leverage the capacity of the power system to reduce aggregate emissions 

through flexible changes in the generating portfolio and cost-effective efficiency 

measures. Commenters noted, as described elsewhere, these states and companies have 

successfully reduced carbon pollution cost-effectively, without creating any reliability 

problems, and while securing concomitant reductions in other harmful air pollutants 

emitted by fossil fuel-fired power plants.

Commenters stated, the proposed Clean Power Plan responds to these distinctive aspects of the 

power sector by establishing state-wide performance targets that will ensure aggregate reductions 

in carbon pollution over time, and that give states flexibility to leverage the dynamic nature of 

the power system in various ways to achieve these aggregate targets. Commenters stated that the 

level of aggregate reductions required are based on a system-wide analysis that recognizes that 

all existing fossil fuel-fired EGUs are part of a large, coordinated system for generating and 

delivering electricity. Commenters noted, for this reason, EPA appropriately considers the 

various mechanisms that are available to states to reduce emissions as a whole from existing 

EGUs - including shifts in dispatch from high-emitting units to low or zero-emitting units, or to 

demand-side efficiency. Commenters said, indeed, as EPA recognizes, an approach that failed to 

account for the actual behavior of the interconnected power system could undermine the 

emission reduction goals of section 111 by increasing the economic competitiveness of higheremitting EGUs relative to other resources.

Commenters stated, as they note elsewhere in these comments, this is a time-tested approach to 

reducing emissions from the power sector under the Clean Air Act, and one that states and 
149

utilities themselves have recognized and demonstrated. Commenters noted, and provided 

examples (e.g., Acid Rain program, NOx SIP Call, CSAPR) to show that, in practice, the 

interconnected nature of the power sector has been recognized and harnessed by Congress, EPA, 

and individual states when designing pollution control programs under the Clean Air Act. 

Commenters said the proposed Clean Power Plan is consonant with this long tradition.

Response 2: We agree with these commenters, although as discussed in preamble section V.B. 

of the final rule preamble, we are not including building block 4 as part of the BSER. These 

comments contain useful information that we incorporate into the record of this rulemaking. 

Comment 3: Commenters agreed that the EPA has the authority to consider the integrated nature 

of the electricity grid when setting BSER.

Commenters stated that the EPA is required to consider demonstrated systems that reduce 

emissions and believed that by taking into consideration the integrated nature of the grid, the 

EPA’s proposal had met this requirement.

Other commenters stated there was nothing in the CAA that prohibits EPA from using its 

discretion to harness the attributes of the integrated electricity grid. 

Response 3: We agree with these comment, although as discussed in section V.B. of the final 

rule preamble of the CPP, we are not including building block 4 as part of the BSER. 

Comment 4: Commenters argued that the EPA lacks the authority to consider the integrated 

nature of the electricity grid when setting BSER.

Commenters believed the approach fails legally, even though theoretically from a policy 

perspective it might make sense. Commenters said even though EPA discusses less carbonintensive ways of providing electricity services, the Agency has failed to consider dozens of 

other relevant policy-related issues. Commenters said the EPA has not considered the effect of 

the proposed rule separately and in combination with other EPA measures on the reliability of 

electricity in the U.S. and its/their effect(s) on electricity prices as noted by Standard and Poor's, 

the North American Electric Reliability Council Study, and a FERC Commissioner. Commenters 

noted (1) the North American Energy Reliability Corporation (NERC) and Standard & Poor's 

predict reliability issues and significant increases in consumer's cost of electricity: Standard & 

Poor's warned of the retirement of 40 to 78 Gigawatts of coal-fired and other power plants by 

2020; (2) NERC's Initial Reliability Assessment Report issued on Nov. 6, 2014 predicted outages 

and other reliability problems will result from implementation of the utility Mercury and Air 

Toxics Standard and Proposed Existing Source Performance Standard also by 2020 ( 

http://www.nerc.com/news/Pages/Reliability-Review-of-Proposed-Clean-Power-Plan-IdentifiesAreas-for-Further-Study,-Makes-Recommendations-for-Stakeholders.aspx); and (3) FERC 
150

Commissioner Moeller agreed in an October 24 interview and noted, "We are really in for a wild 

ride for five to six years because of the amount of coal shutting down in such a short amount of 

time and the transformation toward more gas being used to generate electricity."

Response 4: We disagree with the commenters. Preamble section V comprehensively discusses 

our reasoning in setting the BSER in the final rule. Further, preamble section VIII.G.2. discusses 

our consideration of reliability in the development of the final rule. Additionally, we note that we 

are not including building block 4 as part of the BSER.

Comment 5: Commenters stated that without recourse to a nationally-applied comprehensive 

carbon plan, it is preferable to remain sector-specific in application of reduction allowances as is 

crafted in the current proposed rule. Commenters said while several examples of cap-and-trade 

programs to reduce national or regional emissions of O2 and NOX are cited, these take 

"advantage of the integrated nature of the electricity system when designing programs to allow 

the industry to meet the pollution control objectives in a least-cost manner." Commenters said 

these reductions apparently remain specific to the power-generation industry.

Response 5: We thank the commenter for their support, although as discussed in section V. B. of 

the final rule preamble of the CPP, we are not including building block 4 as part of the BSER.

Comment 6: Commenters stated that the EPA inaccurately described RTO capacity markets at 

79 FR 34881and overstated their potential to help states meet goals. 

Commenters disagreed with the following excerpt from the proposal:

"In most states where generation is no longer subject to price regulation, [RTOs] . . . ensure the 

adequacy of future generation supplies by administering auctions for forward capacity. In these 

auctions, owners of existing EGUs (with consideration of building blocks 1 and 2), developers of 

new EGUs including renewable generating capacity (building block 3), and developers of 

demand-side resources (building block 4) all compete to provide potential resources for meeting 

the projected demand for electricity services." 79 Fed. Reg. at 34,881. 

Commenters said, the Proposed Guidelines suggest that RTO capacity markets can serve as the 

functional equivalent of traditional state integrated resource planning mechanisms and that the 

BSER for CO2 emissions should account for this. Commenters stated, the Proposed Guidelines' 

description of RTO capacity markets is inaccurate because only two FERC-jurisdictional RTOs, 

ISO-NE and PJM, have what are generally considered to be "forward capacity markets." 

Commenters said, the NYISO is currently evaluating a possible move to a forward capacity 

market design but has concluded on two prior occasions that such a change was not needed in 

New York. Commenters said, three FERC-jurisdictional RTOs, namely CAISO, MISO, and SPP, 

do not have any form of mandatory capacity markets. Commenters said, as noted above, the 
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ability of demand-side resources to continue to participate in FERC-jurisdictional capacity 

markets is also in doubt in light of the EPSA decision. 

Commenters stated that the proposal overstate the potential of the capacity markets that actually 

exist in ISO-NE, the NYISO, and PJM to function as de facto approximations of traditional 

integrated resource planning systems. Commenters said, RTO capacity markets were not 

intended or designed to play such a role. Commenters said, their principal purpose is to "ensure 

resource adequacy at just and reasonable rates through a market-based mechanism that is not

unduly discriminatory or preferential as to the procurement of resources." See, e.g., Commission 

Staff Report, Centralized Capacity Market Design Elements, FERC Docket No. AD13-7-000 at 

11-15 (Aug. 23, 2013), available at http://www.ferc.gov/CalendarFiles/20130826142258-

Staff%20Paper.pdf (included in UARG's separately filed Supplemental Materials for the 

Rulemaking Record). 

Commenters said, FERC is considering a number of complex and controversial issues related to 

this goal, such as the types of payments to be made to different kinds of resources and the extent 

to which new resources should be subject to market power mitigation measures if they are 

deemed to be "uneconomic." Commenters said, consequently, EPA has unreasonably overstated 

the potential for RTO-administered capacity markets to support the Proposed Guidelines' 

objectives.

Response 6: We agree that in some areas of the country, forward capacity markets are one way 

EGU’s can defray the costs of implementing the building blocks. Our analysis shows, that even 

where forward capacity markets are not available, the costs of the building blocks is reasonable. 

See the Technical Support Document “Resource Adequacy and Reliability Analysis”. 

Additionally, as discussed in section V. B. of the final rule preamble of the CPP, we are not 

including building block 4 as part of the BSER

Comment 7: EPA correctly recognizes the interconnected nature of the grid. 

Commenters stated, EPA correctly uses existing carbon reduction frameworks and recognizes the 

interconnected nature of the grid for reducing carbon emissions. Commenters said, EPA's 

reliance on existing carbon reduction frameworks and the interconnected nature of the electric 

grid creates an effective means to reduce carbon emissions from existing fossil EGUs. 

Commenters said, EPA has appropriately provided a flexible framework for compliance with 

carbon emissions reduction plans and builds upon existing company, state, and regional 

approaches. Commenters said, as such, these plans can continue to rely on the interconnected 

nature of the grid to reduce carbon reductions from fossil fuel-fired EGUs, including by flexible 

state approaches such as market-based instruments, interstate trading, and regional approaches.

Response 7: We thank the commenter for their support, although as discussed in section V. B. 

of the final rule preamble of the CPP, we are not including building block 4 as part of the BSER.
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1.10.3 Additional considerations related to inclusion of building blocks 2, 3, and 4 as part of 

the basis supporting the BSER: "system of emission reduction"

Comment 1: Commenters stated that the proposed building blocks 2, 3, and 4 are not legal 

because the regulation can apply only to the “affected source” and not to non-emitting entities 

that are not defined as being part of the affected source. Commenters noted, under section 

111(d), states may submit plans "establish[ing] standards of performance for any existing source 

for any air pollutant...to which a standard of performance under this section would apply if such 

existing source were a new source." Put another way, commenters stated, section 111(d) can 

apply only to stationary sources of pollutants in a category for which EPA has promulgated an 

endangerment finding and an applicable NSPS. Commenters also argued that the rule is not legal 

because it would require states to regulate the entire power system and users of electricity instead 

of individual affected facilities. 

Response 1: We disagree with these comments. As we explain in the preamble (section V.B and 

VIII.C) or Legal memorandum, we base the BSER on measures within the affected EGUs’ 

ability to undertake, and we are not adopting the portfolio approach. Some of commenters’ 

specific concerns have been mooted by the fact that this final rule does not include nuclear 

energy or demand-side energy efficiency in the BSER. In addition, in the final rule, the EPA is 

not subjecting non-affected EGUs to regulatory requirements. We also disagree that the rule 

regulates the electric power system rather than individual EGUs. A state is required to submit 

plans that establish an emission rate for each existing plant (unless the state adopts the state 

measures approach). While the emission guidelines that form the basis for the source subcategory specific emission performance rates are based on the BSER, each state has flexibility in 

assigning standards of performance to its sources. 

The following are summaries of specific public comments under this comment:

Commenters stated, in promulgating the Proposed Rule, the Administrator issued state standards 

that cannot be achieved by the existing sources to which the standard must apply under Section 

111(d). Commenters said, the EPA stated, "Each of the building blocks establishes a reasonable 

level of reductions, but not necessarily the maximum amount that could be achieved if that 

building block, and no other, were the basis supporting the BSER." C ommenters said, the state 

goals are based on a combination of all four building blocks. Commenters said, building block 1, 

heat rate improvement, is the only aspect of the proposed BSER that can be accomplished by the 

existing source. Commenters said, through building block 1 alone existing sources cannot 

achieve the level of reductions required by the Proposed Rule. Commenters said, the Proposed 

Rule offers no other source specific means of achieving the proposed standard of performance. 
153

Commenters said, because the standard of performance cannot be achieved by existing sources, 

the proposed standard is contrary to statutory requirements in Section 111(a)(1).

Commenters stated, in making its BSER determination, EPA incorrectly considered emission 

reductions beyond those that are achievable by individual sources within the affected source 

categories. Commenters said, section 111(d)-by its own terms-requires EPA to develop a BSER 

based on emission reductions that are attainable at each affected source. Commenters said, EPA 

has demonstrated the unambiguous nature of Section 111(d) by promulgating emission reduction 

standards for almost 40 years with an understanding that such standards must be achieved by 

individual sources.

Commenters stated, the EPA in this rule-making sets mandatory emission performance standards 

based on measures outside of the affected sources' control and leaves it to the state to identify 

which entities (EGUs or not) should be obligated under the rule. Commenters asserted that this 

reverses the regulatory process and is outside the scope of EPA's authority because three of the 

four proposed building blocks on which EPA based its mandatory state performance standards 

assume that reductions will come from beyond-the-fence entities over which EPA lacks the 

authority to regulate and over which the EGUs have no control. 

Commenters stated, despite the clear requirements of Section 111(d), the Proposed Rule includes 

emission reduction standards based almost entirely on measures that cannot be incorporated or 

achieved by individual units. Commenters said, specifically, three of the four Building Blocks 

that comprise EPA's proposed BSER-increased gas-fired generation dispatch, renewable energy 

generation, and demand-side energy management-are not directed at existing coal-fired EGUs. 

Commenters said, such an approach drastically departs from previous Section 111(d) rules, 

instead invoking a system-wide approach that inappropriately commingles all elements of 

electricity production and distribution into a single "source category." Commenters said, 

crucially, EPA's "outside-the-fence" measures in the final three Building Blocks rely on 

regulatory authority that EPA does not have. 

Comment 2: Commenters stated that the proposed building blocks 2, 3, and 4 are not legal 

because the proposed building blocks do not qualify as a “system of emission reduction” as that

term has ever been understood or historically applied under section 111 of the Act. Commenters 

said, a "system" under section 111 has always consisted of specific work practices or controls 

that an emission unit owner can implement to achieve a known reduction in a pollutant. 

Commenters stated that because the control measures of building blocks 2, 3, and 4 are not under 

the coordination and control of the affected source, these measures are not legally valid “systems 

of emission reduction.”

Response 2: We disagree. For the reasons discussed in section V.A. and V.B. of the preamble 

and in the Legal Memorandum, our interpretation of the BSER is reasonable in light of relevant 

judicial precedent, the statutory text, statutory context, statutory purpose, and legislative history. 

Also, we explain and in the Legal Memorandum that Title IV can inform our interpretation of 
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CAA section 111 and that the control options identified under Title IV can be considered in our 

determination of the BSER.

Comment 3: Commenters supporting EPAs interpretation of "system of emission reduction." 

Response 3: We appreciate these comments. We discuss in the preamble (section V.A and V.B) 

how emissions trading relates to the BSER.

The following are summaries of specific public comments under this comment:

Commenters argued that the statutory language does not constrain the BSER to technology-based 

systems. Commenters noted the 1997 amendments specifically required the EPA to determine a 

"best technological system of emissions reduction" for new sources. See Clean Air Act 

Amendments of 1977, Pub. L. No. 95-95, section 109(c)(1)(A), 91 Stat. 685, 699-700. 

Commenters said, this "technological" standard never applied to existing sources, which were 

subject instead to performance standards that reflected the "best system of continuous emission 

reduction." Commenters said that the Conference Report emphasized that this was a deliberate 

choice on the part of the committee, explaining that the 1977 amendments "mak[e] clear that 

standards adopted for existing sources under section 111(d) of the act are to be based on 

available means of emission control (not necessarily technological)." H.R. Rep. No. 95-564, at 

129 (1977) (Conf. Rep.). Commenters said, and, in 1990, Congress reverted to the original 

formulation of BSER, removing the "technological" qualifier to broaden the scope of tools that 

might be used to achieve greater emission reductions for both new and existing sources. Clean 

Air Act Amendments of 1990, Pub. L. No. 101-549, section 403(a), 104 Stat. 2399, 263.

Commenters supported the EPA's observation that because the Act does not define the term 

'system,' the term should be given its ordinary, everyday meaning: 'a set of things working 

together as parts of a mechanism or interconnecting network; a complex whole' and that this 

definition is broad - it encompasses virtually any 'set of things' that reduce emissions. 

Commenters also noted that "system of emission reduction," as used in section 111(a) does not 

have any modifiers that would limit methods of compliance to only Block 1 measures. The 

commenters noted that in 1977 Congress added special language that required standards for new 

EGUs only to employ the "best technological system of emission reduction," but this limitation -

which Congress deleted in 1990 - never applied to standards of performance for existing sources 

(including EGUs) under section 111(d).

Commenters believed including beyond-the-fence-line compliance approaches is not only a 

permissible reading of the CAA, but is also a logical approach. Commenters noted that the 

interpretation of "system" to include beyond-the-fence approaches recognizes that modern 

electric systems are not stand alone production facilities, but rather an integrated network of 

energy supply and demand that is composed of a variety of generation resources with varying 

emission profiles, dispatched by regional system operators and connected by a transmission grid 
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to consumers, who themselves hold the key to demand reduction. Commenters also argued that 

the measures in building blocks 2, 3, and 4 are demonstrated to reduce emissions in a cost 

effective manner.

Commenters noted that other provisions of the 1990 Clean Air Act Amendments use the term 

"system" to refer to market-based pollution control mechanisms. Commenters noted, for 

example, that the 1990 Amendments refer to the Acid Rain Program as an allowance "allocation 

and transfer system," and elsewhere, the 1990 Amendments authorize EPA to develop a "system 

or systems of regulation" that may employ "economic incentives" to control emissions of volatile 

organic compounds from consumer or commercial products. Commenters noted that it is 

ordinarily presumed "that identical words used in different parts of the same act are intended to 

have the same meaning," Atl. Cleaners & Dyers v. United States, 286 U.S. 427, 433 (1932), and 

there is nothing to rebut this presumption here. Hence, commenters argued that the EPA may 

reasonably conclude that the term "system" as used in section 111(a)(1) and reflected in section 

111(d) encompasses the same type of market-based approaches to pollution control encompassed 

by the Acid Rain Program's "allowance system" and the volatile organic compounds "system or 

systems of regulation."

Comments that EPA's formulation of the best system of emission reduction reflects a commonsense approach to achieving reductions from the affected EGUs. Commenters stated that the 

electricity sector is unique among source categories due to the relative fungibility and 

interchangeability of electricity produced by sources on the interconnected grid; no other source 

category to which standards of performance might be applied under section 111(d) is so 

integrated, such that an increase in the operation of a lower emitting source to fulfill demand 

results in a concomitant reduction in emissions from a higher emitting source. Commenters said 

in competitive electricity markets, demand is met on a moment-by-moment basis so that, among 

interchangeable marginal sources, those that can generate the needed electricity at least cost to 

consumers (which are also generally the most energy efficient) will operate instead of higher 

cost, less efficient sources. Commenters said that given the fundamental nature of electricity 

markets, EPA's proposed formulation of the BSER as expressly including reductions achieved 

through re-dispatch of the existing fleet of generating sources to those with the lowest emissions 

reflects a common-sense approach that will achieve the required reductions at least cost to 

ratepayers. Commenters said the alternative formulation of the BSER proposed by EPA -

whereby the reductions achieved through Building Blocks 2 through 4 are not actual components 

of the system of emission reduction, but instead provide the basis for quantifying reductions in 

affected EGU emissions - similarly reflects a common-sense approach that appropriately 

recognizes the interconnected nature of the electricity grid.

Commenters also supported EPA’s definition of system of emission reduction because some 

states do not have fossil fuel-fired EGUs. Commenters said, if excluded from the rule, these 

states would not be required to participate in measures to reduce emissions and as a result, CO2 

emissions in other states would increase, making it not possible to meet their emission reduction 

goals.
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Commenters stated, furthermore, although Congress made changes to the definition of "standard 

of performance" in 1977 that introduced additional requirements and distinctions between the 

standards for new and existing sources, with the 1990 amendments, Congress essentially restored 

the 1970 version of the term. Commenters said, changes to the definition made in the 1977 

Amendments to the Clean Air Act required section 111 standards for new sources to reflect "the 

best technological system of continuous emission reduction." 

Commenters stated, in contrast, the section 111 standards for existing sources were to reflect the 

"best system of continuous emission reduction," which, as clarified by the Conference Report, 

need not be a technological system. Commenters said, in 1990, Congress removed the 

requirements that standards for new sources be based on "technological" systems and that 

standards for both new and existing sources achieve "continuous" reductions, restoring use of 

broad "system" language for both new and existing source standards. Commenters said, thus, the 

1990 version of section 111 that Congress adopted was strikingly similar to the 1970 version, 

calling for "standards of performance" for both new and existing sources that would reflect the 

"best system of emission reduction." Commenters said, it is noteworthy that even during the 

period of time when Congress determined a more specific definition of "standard of 

performance" was advisable for new sources, it did not take this approach for existing sources. 

Commenters said, the current text of the Clean Air Act reflects both Congress' more recent 

decision to allow EPA to select a non-technological system of emission reduction when 

promulgating standards for new sources under section 111 as well as Congress' longstanding 

policy of allowing that approach for existing sources. 

Commenters stated, courts have recognized that the identification of the best system of emission 

reduction is an expansive, flexible endeavor, in the service of securing the maximum emission 

reductions, finding that EPA may weigh "cost, energy, and environmental impacts in the 

broadest sense at the national and regional levels and over time as opposed to simply at the plant 

level in the immediate present." Commenters said, further, courts have noted that EPA's choice 

of the best system of emission reduction should encourage the development of systems that 

achieve greater emission reductions at lower costs and deliver energy and nonair health and 

environmental benefits. 

Commenters argued that EPA may consider other relevant factors, including emission 

reductions, promotion and development of new technologies and costs not just at the source level 

but also in the broadest sense at the regional or national scale and over a long time horizon, and 

cited Sierra Club v. Costle, 657 F.2d at 330

Commenters stated, in short, section 111 gives EPA wide discretion to identify an emission 

reduction system that relies on solutions such as averaging to maximize environmental 

performance and enhance cost-effectiveness.

Comment 4: EPA misinterprets what may constitute a "system" of emission reduction.
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Response 4: We disagree with this comment. For the reasons discussed in section V.A. and V.B. 

of the preamble and in the Legal Memorandum, our interpretation of the BSER is reasonable in 

light of the statutory text, statutory context, statutory purpose, and legislative history. In the 

preamble, we discuss why the unique facets of the electricity system, including, among other 

things, the fungibility of electricity, the physical interconnectedness of the sources and 

customers, and the lengthy history of dispatch shifts supports our determination of the BSER. 

We also discuss why, as a legal matter, section 111(d)(1) and (a)(1) does not limit the BSER as 

commenters believe. Also, we have concluded that our approach for the BSER for new affected 

EGUs does not constrain our approach for the BSER for existing affected EGUs. In any event, 

we have separate BSER determinations in this rule for steam EGUs (building blocks 1, 2, and 3) 

and combustion turbines (building block 3).

The following are summaries of specific public comments under this comment:

Commenters stated that a more narrow and specific understanding of “system of emission 

reduction” is reflected in the legislative history for the 1977 and 1990 Clean Air Amendments. 

Commenters cited text from the committee reports for the bills that ultimately became the 1970 

CAA Amendments, the House Committee on Interstate and Foreign Commerce, reporting H.R. 

17255, the Senate Committee on Public Works' report for the Senate bill, S. 4358, and a 

"Summary of the Provisions of Conference Agreement on the Clean Air Amendments of 1970" 

inserted into the Congressional Record and concluded the this review of the legislative history 

reinforces that Congress intended “standard of performance” to mean emission limitations that 

would be accomplished at individual units through the use of low-emitting fuels, process 

changes, operation changes, or direct emission controls. Commenters argued that EPA’s broad 

interpretation of “system” is inconsistent with examples found in the Act and the legislative 

history.

Commenters argued that sections 111(b) and 111(d) are inextricably tied, and EPA must interpret 

key regulatory terms, such as "standard of performance" and "best system of emission reduction 

... adequately demonstrated" in the same manner under each provision. Commenters stated, 

EPA's claim that it has discretion to adopt a beyond the fence line approach to BSER based on an 

expansive interpretation of the word "system" and, specifically, EPA's assertion that the word 

"system" should be interpreted to mean "[a] set of things working together as parts of a 

mechanism or interconnecting network" misses the mark. Commenters said, first, under the plain 

meaning of the statute, the system of emission reduction must be something that can be applied 

to the "existing source" which is a "building, structure, facility or installation which emits or may 

emit any air pollutant." Commenters said, second, the operative term in the definition of standard 

of performance in Section 111(a)(1) is not "system," but "system of emission reduction." 

Commenters said, thus, even under EPA's interpretation, Section 111 requires EPA or the States 

to identify a set of things working together as parts of a mechanism or interconnecting network 

to reduce emissions. Commenters said, the four Building Blocks identified by EPA do not meet 

this standard because they are a set of things working together as parts of a mechanism or 

interconnecting network to generate electricity. Commenters also said, the mere fact that shifting 

generation from coal to other energy sources has an effect on net CO2 emissions from the 
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electricity sector does not make those other energy sources "pollution prevention measures" for 

coal-fired EGUs. See id. at 34,886.

Commenters stated, further, EPA's interpretation of "system" under Section 111(d) allows it to 

unlawfully shift the focus of regulation to other entities that are not "existing sources" "to which 

a standard of performance under [Section 111(b)] would apply." 42 U.S.C. section 7411(d). 

Commenters said in key respects, the proposed regulation is addressed to State governmental 

agencies, transmission operators, and retail consumers of electricity, none of which emit any air 

pollutant subject to regulation under Section 111(d) and, as a result, cannot be considered 

"stationary sources" within the context of Section 111. Commenters said, even the nuclear 

energy facilities that EPA would prohibit from closing and the renewable energy facilities that 

EPA would require to be built are classified as "zero-emission" under the proposed rule and, as a 

result, are also outside the scope of Section 111.

Commenters said the "system" of emission reductions refers to the range of options that can be 

implemented by an existing source to reduce its emissions, not "anything that reduces the 

emissions of affected sources" regardless of the entity that undertakes the emission reduction. 

Commenters also stated that EPA's approach is unsupported by the CAA legislative history and 

provided an analysis of how the 1977 insertion of the terms "technological" and "continuous" in 

the definition of "standard of performance" and the 1990 restoration of the original 1970 

definition does not give EPA a mandate to regulate electricity dispatch by States, require 

construction of renewable energy, set standards for nuclear retirement, and manage retail 

demand.

Commenters stated, the "system" that EPA has constructed - the "regularly interacting or 

interdependent group of items forming a unified whole" - is not a "system" of reducing emissions 

at coal plants but in reality is a restricting of the electric utility system. Commenters said, 

according to EPA, the "regularly interacting or interdependent group of items" in this system are 

EPA's building blocks, which it calls "components" of this system. Commenters said, but natural 

gas, nuclear, renewable, and energy efficiency resources are obviously not components of coalfueled EGU's; they are components of a state electric utility system. Commenters said, under 

CAA section 111, however, BSER is not the "best system" for operating a state's utility system. 

Commenters said, rather, it is the best system for reducing emissions from the source category 

being regulated. 

Commenters said the building blocks have not been evaluated as a system and, in some ways, 

work against each other (e.g., changing dispatch order actually increases emissions at natural 

gas-fired EGUs.).

Comment 5: Comments suggesting that EPA's standard needs to encompass the full fuel cycle.
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Commenters argued that since emissions are directly related to energy consumption, the focus 

must be on source efficiency and EPA should embrace an efficiency standard that encompasses 

the full fuel cycle and considers the entire energy chain from source to site with rules and 

policies accordingly.

Response 5: We disagree that it is feasible or legally appropriate under section 111 to regulate 

the entire energy chain from the production, storage, and distribution of fossil fuels to the 

combustion in an EGU. As explained in section V.A and V.B of the final rule preamble, we 

have defined BSER to include control measures that are under the control of individual EGUs, 

have been used for years to mitigate emissions, and that are included in integrated resource 

planning for the utility companies. An EGU has no control over the emission control practices 

of their fuel suppliers and would be unable to measure or otherwise determine the emissions 

associated with production of the fuels that they burn. The EPA already has established NSPS 

for certain process steps in the fuels industry, e.g., NSPS from coal cleaning and NSPS for 

natural gas production and processing. If we determine in the future that processing steps in the 

fuel supply chain warrant regulation of GHGs, then will we adopt additional NSPS at that time.

Comment 6: Commenters argued that EPA violated its own implementing regulation in subpart 

B by failing consider emissions requirements by subcategory. Commenters stated that EPA 

provided no analysis to show that the BSER decision considered adopting "...different emission 

guidelines or compliance times or both for different sizes, types, and classes of designated 

facilities when costs of control, physical limitations, geographical location, or similar factors 

make subcategorization appropriate," as required by 60.22(b)(5). Commenters pointed out that in 

past NSPS EPA has adopted separate standards of performance for different types of combustion 

devices and different pollutants. Commenters stated that EPA made subcategorical distinctions in 

the CO2 proposal for new and modified units but abandoned the distinctions in the proposal for 

existing sources.

Response 6: Under 40 C.F.R. § 60.22(b)(5), the EPA retains discretion as to whether and how to 

subcategorize classes of facilities for purposes of setting emissions standards under section 

111(d) of the Clean Air Act (which does not itself require that the EPA establish facility 

subcategories). Section 60.22(b)(5) provides that EPA will “specify different emission guidelines 

. . . for different sizes, types, and classes of designated facilities when costs of control, physical 

limitations, geographical locations, or similar factors make subcategorization appropriate.” 

There is thus no requirement that the EPA establish additional subcategories under section 

111(d) unless it finds that such subcategories are “appropriate.” In this rule the EPA has 

determined that it is appropriate to specify emission guidelines for two subcategories of existing 

fossil fuel-fired EGUs: fossil fuel-fired electric utility steam generating units, and stationary 

combustion turbines. The EPA is not finalizing any further subcategories because it has 

determined that all affected EGUs can achieve the relevant performance standard set by applying 

the BSER to each of these two subcategories. This approach is also consistent with the EPA’s 
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approach in the final rule establishing standards of performance for greenhouse gas emissions 

from new, modified, and reconstructed sources, which defines the same two subcategories. 

Further discussion of the EPA’s approach to subcategorization can be found in the preamble to 

the final rule for existing sources in sections V.A.1.d, V.A.2.i, and V.B.2.

Comment 7: Commenters stated that forcing state legislation to implement Building Blocks 2-4 

is illegal. Commenters argued that (1) the state goals are so stringent that states will have no 

choice but to implement beyond-the-fence emission reduction measures to attain the goals, and 

(2) if a state submits a plan that EPA finds unsatisfactory, EPA would impose a federal plan on 

the state that would require state legislative action to allow the beyond-the-fence emission 

reduction measures. Commenters argued that it is well-established that federal agencies may not 

usurp the authority of states, nor may states be forced to administer federal programs. 

Commenters argued that many states that have adopted requirements regarding Building Blocks 

2, 3 and 4 did so for economic reasons in order to mitigate over-reliance on a limited variety of 

fuel sources and the consequent vulnerability to fuel price fluctuations; the commenters argued 

that EPA's co-opting of these measures for environmental purposes conflicts with the bases on 

which such provisions were adopted, and runs counter to the ends that drove the issuance of 

those state requirements (i.e. by fostering greater dependencies on a more limited range of fuel 

sources). Commenters argued that the proposed rule could cause the sort of resource mix 

imbalances that state RE and EE requirements were designed to combat. Commenters further 

argued that EPA recognized in its Legal Memorandum that it could not order the utilization of 

Building Blocks 2, 3 and 4 in the way it suggests.

Response 7: We disagree with these comments. As we discuss in the preamble (section V.B), the 

affected EGUs are able to implement the building blocks. It is not necessary for a state to 

implement any type of control measures; rather, a state may adopt a state plan that imposes 

emission standards on its affected EGUs, and the affected EGUs will be able to achieve those 

standards by themselves taking actions that implement the building blocks.

Comment 8: Supports broad definition of system because 111(d) applies to states. Commenters 

argued that the CAA makes a distinction between standards of performance for new sources and 

for existing sources under Section 111. Commenters argued that because Section 111(d) for 

existing sources applies to States rather than individual stationary sources, this opens up a greater 

range of "systems" which may be considered appropriate to specify as the "best system of 

emission reduction" under Section 111(d) than is available under Section 111(b).

Response 8: We appreciate these comments and agree with some, although not all, of the 

comment. The BSER must be something that the affected sources can implement BSER, 

although the state may, through the state measures approach, adopt additional measures that may 

result in emission reductions from the affected EGUs, In the preamble and the Legal 
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Memorandum, we discuss and compare the types of BSER that we determine under the section 

111(b) rule and this rule. We agree that the unique characteristics of the electric power sector 

support our determination that building blocks 2 and 3 are part of the BSER, but those types of 

building blocks may not be the BSER for other source categories.

Comment 9: Commenters stated one caveat is that the EPA's proposal undermines its own 

interpretation by grouping coal and gas plants into separate categories. Commenters said its 

second building block explicitly assumes generation will shift from coal to gas. Commenters 

stated doing so does cut overall emissions from fossil power, but not those from gas - gas 

emissions go up. Commenters said the other four building blocks may have similar effects, 

especially to the extent that states allow trading. Commenters stated in other words, standards 

ostensibly "for" the gas category actually increase gas emissions. Commenters said the EPA can 

solve this problem simply by combining all fossil power into one legal category, as it already 

assumes for purposes of setting targets in the proposal. Commenters stated the agency has 

cryptically "co-proposed" such a merger of categories, but the traditional split categories remain 

the primary approach, for reasons that are unclear. Commenters said the agency has extremely 

broad powers to define and redefine categories of sources. Commenters stated the fix here is easy 

- joining all fossil power in the same category - but the agency actually needs to do it or risk 

unnecessary legal vulnerability.

Response 9: We do not agree that treating steam EGUs and combustion turbines as two 

subcategories imposes any legal vulnerability. As we explain in section IV.E of the final rule 

preamble, all fossil fuel-fired EGUs are a single category; and, therefore, all EGUs are eligible to 

participate in any emissions trading programs that are established by the states in any section 

111(d) plans that are approved by EPA. We selected the subcategories of steam EGUs and 

combustion turbines to determine state emissions guidelines that can be achieved at a reasonable 

cost by the integrated utility system as a whole. 

Comment 10: Commenters argued that the procedural and compliance requirements of EPA's 

111(d) rule must support incremental and iterative policy and business developments by 

requiring gradual reductions, and allowing time for state and other key stakeholder policies and 

practices to evolve. Commenters stated that only in this way can EPA's rule accurately and 

appropriately utilize a "beyond the fence" BSER comprising the interconnected bulk electric 

system.

Response 10: We disagree with these comments. As we discuss in the preamble (section V.D.), 

the building blocks qualify as part of the BSER because they are adequately demonstrated.
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Comment 11: Commenters argued that section 111 rests on the premise that adding emission 

controls to new sources will be less costly than it is for existing sources, and thus that more 

stringent standards may be inappropriate. However, commenters argued, for 26 states, EPA's 

outside-the-fence interpretation of BSER for existing EGUs results in emission limitations (state 

goals) that are more stringent than the emission limitations EPA has proposed to determine are 

achievable and adequately demonstrated for any affected new EGU. Commenters argued that 

this result is "inconsistent with the design and structure of the statute as a whole" and so "does 

not merit deference." 

Response 11: For the reasons discussed in the preamble (section V.A and V.B), our 

interpretation of the BSER is reasonable in light of the statutory text, statutory context, and 

legislative history. We also explain in the preamble and the Legal Memorandum why CAA 

section 111(b) and (d) have a different BSER and why the section 111(d) requirements cannot be 

said to be more stringent than the section 111(b) requirements.

Comment 12: Support for and opposition to non-electric utility sources.

Commenters stated that the final rule should make it clear that the Clean Power Plan does not set 

a precedent for regulating the industrial sector like the utility sector and the final rule should 

have measures to prevent industrial GHG leakage to foreign companies that sell into U.S. 

markets if manufacturing must be moved offshore to achieve required GHG reductions in the 

industrial sector. Commenters were concerned that regulating GHG emissions outside-the-fence 

line sets a problematic precedent for the manufacturing sector. Commenters stated that the 

electric utility sector is significantly different than the industrial sector because, the electric 

utility sector does not face international competition and all prudent costs incurred by electric 

utilities are passed through to electricity consumers. Commenters stated that some electric 

utilities will actually benefit financially from the Clean Power Plant because they will be able to 

secure a return on investment on new capital investments that are required for compliance. 

Commenters pointed out that industrial companies selling products in international markets 

cannot pass along costs like regulated electric utilities, and commenters were concerned that 

requiring industrial companies to reduce GHG emissions outside-their-fence line will result in 

increased costs that could dramatically reduce competitiveness and result in GHG leakage to 

foreign countries.

Commenters stated that the final rule should include provisions expressly delineating the 

treatment of sources within the metalcasting industry within state plans because otherwise the 

national metalcasting industry will be forced to make its case for reasonable and meaningful 

regulations in 50 individual state capitols.

Response 12: We discuss in the preamble (section V.A and V.B) and the Legal Memorandum 

that the BSER for this rule is appropriate for the electric power sector, and we discuss the extent 

to which the similar approaches could apply to other industries noted by other commenters.
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Comment 13: Commenters argued that EPA can only arrive at a beyond-the-fence definition of 

"standards of performance" for existing sources by first redefining "performance." Commenters 

argued that performance should logically be read to mean the amount of emissions attributable to 

a given generation output from a particular source, but the EPA is implicitly redefining the term, 

to instead mean the total amount of emissions from the source category, even where that requires 

a particular unit to be used less or shut down altogether. Commenters stated that such a reading 

of the term "performance" would allow EPA to use the Clean Air Act to simply require 

Americans to use less of those technologies that EPA believes could be replaced by better 

substitutes that result in lower emissions from nearly any industry. Commenters argued, after 

providing several supporting hypothetical examples, that EPA's approach would be both lawless 

and boundless.

Response 13: We disagree with these comments. The commenters are incorrect concerning the 

definition of “performance” because “performance” is not a separate word that takes its own 

definition, rather, it is part of the phrase “standard of performance,” which is a defined term. In 

any event, even if “performance” were treated as somehow separate, it could be a reference to 

emissions performance, which is open ended and permits of various types of standards 

(including, e.g., a tradeable allowance system.) There is no reason why the term should be 

constrained as commenters suggest.

Comment 14: Commenters argued that the Proposal's definition of affected entity is remarkably 

broad, and includes any "entity with obligations under this subpart for the purpose of meeting the 

emissions performance goal requirements in these emission guidelines." Commenters argued that 

this definition, could conceivably apply to any entity that a state wishes to target for energy 

consumption reductions, and that the Agency itself suggests states look to applying requirements 

to "electric distribution utilit[ies]," "private or public third-party entit[ies]," or "a state agency, 

authority or entity." Commenters noted that the Supreme Court recently rejected an attempt by 

EPA to "assert[] newfound authority" over entities such as these and then "decide, on an ongoing 

basis,...how many of those sources to regulate." Commenters noted, according to EPA, measures 

applicable to these entities "would be federally enforceable because they would be included in 

the state plan." 

Commenters argued that Section 111 does not authorize this approach, and neither EPA nor the 

states may impose legally enforceable obligations on entities other than those within the listed 

source category for the purpose of achieving aggregate emission reductions reflected in the 

measures contained in Building Blocks 2, 3, and 4. Commenters argued that the statute, in fact, 

says the exact opposite. Section 111(b) expressly states that EPA may "establish[] Federal 

standards of performance for new sources" within a "category of stationary sources in a list under 

subparagraph (A)." Commenters noted, under section 111(d), states may submit plans 

"establish[ing] standards of performance for any existing source for any air pollutant...to which a 
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standard of performance under this section would apply if such existing source were a new 

source." Put another way, commenters stated, only stationary sources of pollutants in a category 

for which EPA has promulgated an endangerment finding and an applicable NSPS can be 

subjected to any obligation under section 111(d).

Commenters argued that EPA's rationale that "[t]here is no specific language in CAA section 

111(d) or elsewhere in the Act that prohibits states from including measures other than 

performance standards and implementation and enforcement measures" in state plans for existing 

sources is not supported. Commenters also noted that the Supreme Court recently reaffirmed, 

Congress must "speak clearly if it wishes to assign to an agency decisions of vast 'economic and 

political significance.'" Commenters argued that there is no justification for EPA's claim of this 

authority. 

Commenters stated that EPA's regulatory structure for its proposed NSPS for new units is source 

specific as is its proposed rule on Modified and Reconstructed Stationary Sources. Commenters 

stated that EPA fails to offer a sufficient explanation for changing the regulatory approach for 

existing units, particularly for a policy change as radical and far reaching as found in the CPP; 

i.e., section 111(d) permits regulation of a source only if that source is one "to which a standard 

of performance under this section would apply if such existing sources were a new source." 

Commenters stated that because EPA's proposed Section 111(b) new unit rule applies only to 

fossil-fired units, there is no basis for EPA to establish existing unit standards for non-emitting 

sources such as wind, solar or nuclear generation, let alone energy efficiency, under Section 

111(d).

Response 14: We disagree with this comment. Under both section 111(b) and section 111(d), the 

EPA regulates sources in the source category. In addition, in the final rule, the EPA is not 

subjecting non-affected EGUs to regulatory requirements.

Comment 15: Supports broad definition of system because 111(d) applies to states. Commenters 

argued that the CAA makes a distinction between standards of performance for new sources and 

for existing sources under Section 111. Commenters argued that because Section 111(d) applies 

to States rather than individual stationary sources, this opens up a greater range of "systems" 

which may be considered appropriate to specify as the "best system of emission reduction" under 

Section 111(d) than is available under Section 111(b).

Response 15: We appreciate these comments and agree that section 111(d) affords significant 

flexibility to the states. For the reasons discussed in the preamble, we interpret the BSER to 

focus on actions that the affected sources can take.
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Comment 16: Commenters stated that the CAA supports a broad definition of system of 

emission reduction. Commenters stated, although Congress made changes to the definition of 

"standard of performance" in 1977 that introduced additional requirements and distinctions 

between the standards for new and existing sources, with the 1990 amendments, Congress 

essentially restored the 1970 version of the term. Commenters said, changes to the definition 

made in the 1977 Amendments to the Clean Air Act required section 111 standards for new 

sources to reflect "the best technological system of continuous emission reduction." 

Commenters stated, in contrast, the section 111 standards for existing sources were to reflect the 

"best system of continuous emission reduction," which, as clarified by the Conference Report, 

need not be a technological system. Commenters said, in 1990, Congress removed the 

requirements that standards for new sources be based on "technological" systems and that 

standards for both new and existing sources achieve "continuous" reductions, restoring use of 

broad "system" language for both new and existing source standards. Commenters said, thus, the 

1990 version of section 111 that Congress adopted was strikingly similar to the 1970 version, 

calling for "standards of performance" for both new and existing sources that would reflect the 

"best system of emission reduction." Commenters said, it is noteworthy that even during the 

period of time when Congress determined a more specific definition of "standard of 

performance" was advisable for new sources, it did not take this approach for existing sources. 

Commenters said, the current text of the Clean Air Act reflects both Congress' more recent 

decision to allow EPA to select a non-technological system of emission reduction when 

promulgating standards for new sources under section 111 as well as Congress' longstanding 

policy of allowing that approach for existing sources. 

Commenters stated, in short, section 111 gives EPA wide discretion to identify an emission 

reduction system that relies on solutions such as averaging to maximize environmental 

performance and enhance cost-effectiveness.

Response 16: We agree that the Clean Air Act supports a broad definition of system of emission 

reduction, given the unique circumstances of the electric power system.

1.10.4 Additional considerations related to inclusion of building blocks 2, 3, and 4 as part of 

the basis supporting the BSER: "best" system that is "adequately demonstrated"

Comment 1: EPA's Finding That the BSER Has Been "adequately demonstrated" Is Supported 

by Both System Level Modeling and an Analysis of the System Components. 

Commenters said, EPA has shown that the BSER and alternative BSER is "achievable because it 

has been achieved" by demonstrating how all of the BSER's elements have been adequately 
166

demonstrated in states, and that its reduction goals are realizable and not unreasonably costly by 

providing thorough modeling accompanying the Proposed Rule. Commenters said, thus, EPA 

has demonstrated that BSER feasibility and cost requirements have been met at the state level 

and at the sector level through its modeling of what may "fairly be projected." Commenters 

stated, EPA's proposed system of emission reduction is authorized by the Clean Air Act.

Commenters stated, EPA's analysis is supported by a robust and growing literature supporting 

the strategies identified in the building blocks of the BSER (which are the same strategies that 

enable the alternative BSER of reduced utilization). Commenters said, the power industry itself 

has identified supply-side heat rate improvements as a commercially proven, cost-effective first 

step to reduce power plant CO2 emissions. Commenters said, in addition, the last twenty years of 

electricity generation show that increased dispatch of natural gas combined cycle (NGCC) plants 

and further deployment of renewable energy generation is technologically feasible, having been 

thoroughly demonstrated in the United States and in Europe, and that they do not pose 

unreasonable additional costs. Commenters said, in fact, increased NGCC dispatch and 

renewable energy utilization are both commercially available approaches to controlling carbon 

emissions and thus easily meet the statutory requirement for their inclusion with the BSER. 

Commenters said, the states have decades of experience with demand-side energy efficiency, 

which is recognized as an energy resource in the ISO New England Forward Capacity Market, 

and the role of efficiency is increasingly being recognized in flattening of the growth in demand 

for energy. 

Commenters stated, this system of emission reduction reflects the real-world reality of the 

electricity system, within which different power generation sources and demand-side energy 

efficiency resources are managed dynamically to ensure that energy demand is met at each 

moment in time. Commenters said, companies and states have long been relying on the 

interconnected nature of the electric grid, including demand-side management, to meet system 

demand while reducing harmful pollution from power plants. Commenters said, adding 

renewable electricity can displace generation from fossil fuel-fired plants - and will reduce 

emissions accordingly. Commenters said, similarly, improving energy efficiency lowers demand 

for electricity, reducing power generation and associated emissions. Commenters said, states and 

power companies have been increasing use of natural gas plants which has reduced emissions 

from coal-fired power plants. Commenters said, coal-fired power plants can (and many already 

do) co-fire with natural gas, which reduces combustion emissions. Commenters said, coal plants 

can also be converted to burn natural gas (which has been done at many plants) and this also 

reduces combustion emissions. Commenters said, these techniques - switching to lower carbon 

fuels, non-emitting generation resources, and improving energy efficiency - have all been used to 

comply with a range of air pollution programs under the Clean Air Act.

Commenters said, the flexibility of this system enables sources and states to develop plans that 

will secure emission reductions cost effectively, ensure that there are no effects on reliability, 

and reduce carbon emissions. Commenters said, this system allows sources and states to secure 

all of the co-benefits of transitioning to cleaner energy and harvesting energy efficiency, 
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reducing not only carbon pollution but also the burden of other health-harming air pollution on 

their communities. 

Commenters said, furthermore, an assessment of benefits may also be instructive in determining 

the reasonableness of the costs. Commenters said, EPA's BSER and alternate BSER formulations 

easily meet these requirements. Commenters said, EPA's reliance on well-established and costeffective systems of emission reduction for each of the building blocks places its actions 

comfortably within the Clean Air Act's legal requirements. Commenters said, and, the 

implementation of numerous measures, including those in the building blocks, have 

demonstrated that reduced utilization of fossil-fueled power plants reduces emissions in a costeffective manner.

Response 1: This comment is supportive of the overall approach the EPA is taking to the BSER 

and contains useful information that we incorporate into the record of this rulemaking. 

Comment 2: Commenters stated that BB2 is adequately demonstrated. 

Commenters stated, regarding increasing natural gas utilization, even if such utilization is not 

feasible in every region or state, the EPA is not required to demonstrate that BSER is universally 

achievable; only that it is nationally achievable and adequately demonstrated. Commenters said, 

the Clean Power Plan rule has clearly met this burden.

Response 2: This comment is supportive of the overall approach the EPA is taking to the BSER 

and contains useful information that we incorporate into the record of this rulemaking.

Comment 3: Commenters said that, EPA legally justifies BSER by proposing that BSER is the 

combination of building blocks 1 through 4. Commenters agreed that each building block meets 

the criteria for BSER because they: 1) achieve emission reductions; 2) are of reasonable cost; 3) 

encourage technology development; and 4) are adequately demonstrated to reduce emissions 

from affected sources. Commenters said that each building block satisfies the statutory and case 

law criteria for BSER, is appropriately part of the target setting process for emission reductions, 

and is sufficiently tied to emission reductions at affected sources either by affecting their 

operation or displacing higher emitting resources with low- or zero-emitting generation or energy 

efficiency.

Response 3: This comment is supportive of the overall approach the EPA is taking to the BSER 

and contains useful information that we incorporate into the record of this rulemaking, although 

we are not finalizing the measures in building block 4 as part of the BSER.
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Comment 4: Commenters said that, EPA must consider the cost and impacts of each source to 

adequately demonstrate nuclear power, renewable energy, and energy efficiency in terms of 

BSER. Commenters said that, renewable energy and energy efficiency have been adequately 

demonstrated using that definition and are cost effective.

Response 4: See section V.B of the final rule preamble of the CPP for an explanation of our 

basis for why the building blocks are adequately demonstrated and the requirements that will 

apply to the affected EGUs.

Comment 5: Commenters stated that the notion of state implementation flexibility is at odds 

with the building block methodology. Commenters stated that if a state determines it can do 

better than EPA's assumed stringency for one building block it does not mean that the state 

cannot obtain the level of stringency EPA has set for another building block. Commenters said 

that determining the "best" amount each state should obtain for each building block gives EPA 

no logical basis to say that what matters is the overall goal and not the building 

blocks. Commenters provided an example of the grid operation model that EPA used, which the 

commenters said shows that state compliance strategies deviate significantly from the "best" 

system. 

Response 5: See section V.B of the final rule preamble of the CPP for an explanation of our 

basis for why the building blocks are adequately demonstrated and the requirements that will 

apply to the affected EGUs.

Comment 6: Commenters said, they know that a system that includes improvements in fossil 

plant efficiency, displacement of higher-emitting plants with lower-emitting plants, increased 

reliance on renewable generation and increased investments in demand-side efficiency is 

adequately demonstrated because power companies and states across the country are effectively 

using each of the building blocks to cut emissions of carbon pollution and other dangerous air 

pollutants from fossil fuel-fired power plants. Commenters said, they agree with EPA that such a 

system is the "best" system as defined by the Clean Air Act because it has the potential to secure 

large reductions in carbon pollution at reasonable cost, and will provide companies and states 

with flexibility to manage energy requirements and identify the emission reduction pathways that 

are best suited to their particular circumstances.

Response 6: This comment is supportive of the overall approach the EPA is taking to the BSER 

and contains useful information that we incorporate into the record of this rulemaking.

Comment 7: A system that promotes increased use of fossil fuels does not adequately consider 

adverse environmental effects into account in setting BSER
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Commenters noted several court cases (Essex Chemical and Sierra Club v. Costle) in concluding 

that a system that promotes the increased use of fossil fuels and the future construction of more 

natural gas-fired power plants with a useful life far exceeding the target date of 2030 (while also 

acknowledging that increased use of natural gas will supplant investment in renewable energy 

sources) cannot constitute the "best" system of emission reductions as the courts have defined it.

Response 7: See section V.B of the final rule preamble of the CPP for an explanation of our 

basis for why the building blocks are adequately demonstrated and the requirements that will 

apply to the affected EGUs.

Comment 8: Commenters said that, BSER should be based on applications that have been 

adequately demonstrated and takes into account the different sizes, types and classes of existing 

sources, as well as costs of control, physical limitations, geographical location and similar factors 

which make sub-categorization appropriate.

Response 8: See section V.B of the final rule preamble of the CPP for an explanation of our 

basis for why the building blocks are adequately demonstrated and the requirements that will 

apply to the affected EGUs.

Comment 9: Commenters stated that EPA has not met its statutory duty to provide reasonable 

and adequately demonstrated BSER, but instead imposes strict and infeasible emission 

limitations on states and their facilities. Commenters argued that by proposing "discretionary" 

building blocks, EPA is avoiding having to provide a specific BSER that is both reasonable and 

adequately demonstrated. Accordingly, commenters argued that the EPA has not provided an 

adequate proposal for BSER for review and comment because the proposed rule does not provide 

an adequately demonstrated reasonable standard and leaves states and the public guessing at 

what emissions reductions are viable, adequate, and achievable.

Response 9: See section V.B of the final rule preamble of the CPP for an explanation of our 

basis for why the building blocks are adequately demonstrated and the requirements that will 

apply to the affected EGUs.

Comment 10: Commenters argued that the Proposed Rule with a broad definition of system 

exceeds EPA's legal authority under Section 111(d) of the CAA because the EPA has failed to 

show that the proposed BSER has been "adequately demonstrated" and because the proposal 

lacks specificity as to the requirements that will ultimately apply to affected EGUs (and 

potentially other unidentified entities) under the final rule and adopted state plans. 
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Response 10: See section V.B of the final rule preamble of the CPP for an explanation of our 

basis for why the building blocks are adequately demonstrated and the requirements that will 

apply to the affected EGUs.

Comment 11: Commenters asserted that the proposed BSER has not been adequately 

demonstrated. 

Commenters stated, the EPA has not "adequately demonstrated' its proposed BSER to be 

reasonably reliable, reasonably efficient, and not exorbitantly costly. Commenters said, by 

choosing a BSER that requires a significant change in the generation mix for the nation as a 

whole (and Kansas in particular) the EPA has created incredibly complex legal issues over 

whether the EPA or each individual State ultimately determines whether the electric system is 

reasonable, reliable, and efficient. Commenters said, the EPA has failed to demonstrate that its 

BSER, using generation mix as its "system," is "adequately demonstrated" as required by CAA 

Section 111. 

Commenters said, the EPA provides no rigorous technical modeling or analysis demonstrating its 

BSER to be "reasonably reliable, reasonably efficient, and "reasonably" expected to serve the 

interests of pollution control without becoming exorbitantly costly in an economic or 

environmental way." Commenters provided further technical analysis showing EPA's BSER is 

not "adequately demonstrated."

Commenters stated, the EPA demonstrates its lack of experience and technical knowledge of the 

electrical system, generation mix, and associated reliability issues by relying solely on the 

generic assertion that States have implemented measures similar to the EPA's building blocks. 

Commenters said, the EPA has completely failed to "adequately demonstrate" that its Clean 

Power Plan, as proposed, ensures the electrical system in Kansas will continue to be "reasonably 

reliable, reasonably efficient, and can reasonably be expected to serve the interests of pollution 

control without becoming exorbitantly costly in an economic or environmental way."

Commenters requested that the EPA withdraw the proposed guidelines and issue new guidelines 

that allow the southern states to establish policies that are in the best interest of the region and 

each of its states. Commenters said, the guidelines should (among other things) establish 

emissions guidelines based on adequately demonstrated systems that are fuel and technology 

specific.

Commenters stated, none of the individual Building Block goals set for West Virginia is 

"achievable." Commenters said this, alone, should establish that the proposed system of emission 

reduction is not adequately demonstrated. Commenters said in addition, the comments provided 

below also illustrate significant flaws with EPA's reasoning in establishing these Building Blocks 

and the associated goals, which preclude any conclusion that EPA's best system of emission 
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reduction or any of its elements has been adequately demonstrated or that its emissions goals are 

achievable.

Commenters discussed cost. Commenters said, the FPSC contends that EPA's proposed BSER in 

its current form is unreasonable, extremely difficult to achieve both in scope and timeline, and 

should not be used to set an emissions performance requirement for Florida. 

Commenters discussed adequately demonstrated. Commenters said, the proposed emission 

performance requirements for Florida are not based on a BSER that has been adequately 

demonstrated, as required by Section 111(d). Commenters said, an adequately demonstrated 

system is one that has been shown to be reasonably reliable, reasonably efficient, and that can 

reasonably be expected to serve the interest of pollution control without becoming exorbitantly 

costly in an economic or environmental way. Commenters said, the EPA's basis for stating that 

its BSER analysis is adequately demonstrated is that each of the building blocks may be well 

established in some, but not all states. Commenters said, this basis fails to take into account the 

Florida-specific factors discussed throughout these comments. Commenters said, the disclaimer 

in the Notice of Rulemaking that none of the building blocks in the BSER "are being mandated, 

the states are free to use any compliance strategy" does not alleviate the FPSC's concerns.

Commenters stated, as a part of its analysis of the Proposed Rule, the FPSC solicited comments 

from Florida's generating utilities and other interested persons. Commenters said, based in part 

on the responses, the FPSC believes that EPA's CO2 emission performance requirements for 

Florida cannot be met solely by increased efficiency of operating coal-fired units, increased 

dispatch of natural gas-fired electrical units, and decreased use of coal-fired EGUs. Commenters 

said, the Proposed Rule would require Florida's utilities to attempt to implement all of the 

proposed building blocks, despite the fact that these proposed requirements do not take into 

account Florida's specific policies and circumstances. Commenters said, therefore, the BSER has 

not been adequately demonstrated as an effective approach to achieve EPA's proposed emission 

performance requirements for Florida.

Commenters stated, the building blocks have not been shown to be adequately demonstrated for 

the State of Nebraska. Commenters said, the EPA has failed to show that the building blocks 

reflect an emission limitation which is achievable or adequately demonstrated in the state of 

Nebraska.

Commenters stated in promulgating the CPP and specifically the BSER (i.e., four "building 

blocks"), EPA essentially treats each individual state rather than the units as "designated 

pollutants." Commenters stated this is an unprecedented departure from how EPA has 

historically developed emissions regulations, and the agency has not demonstrated that the 

building blocks are "adequately demonstrated" or achievable with reasonable considerations of 

cost, as statutorily required.
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Response 11: See section V.B of the final rule preamble of the CPP for an explanation of our 

basis for why the building blocks are adequately demonstrated and the requirements that will 

apply to the affected EGUs.

Comment 12: Commenters stated, in its proposed rulemaking, EPA has cobbled together an 

amalgam of energy policies that individually and collectively dictate unlawful emission rate 

standards for existing fossil fuel- fired EGUs that are not adequately demonstrated and are 

perhaps more costly than any other EPA rulemaking in the Agency's history. Commenters said, 

importantly, EPA's BSER analysis must be based on "adequately demonstrated" technology at a 

reasonable cost.

Commenters said, that critical EPA assertion is simply false. Commenters said, the truth is vastly 

and vividly different. Commenters presented Table 1 (titled: "BSER Is Not Adequately 

Demonstrated"), which shows which of the fifty states met the EPA's four building blocks (CoalFleet Demonstrates 6% Net Emission Rate Improvement; NGCC Fleet Demonstrates 70% 

Capacity Factor in 2012; Renewable Generation Level Met EPA's Target in 2012; Demonstrates 

1.5% Incremental Annual EE Savings in 2012).

Commenters stated, as shown in Table 1, no state has enacted or undertaken all of EPA's socalled Building Blocks at the levels prescribed by EPA. Commenters said, even if the cited 

programs were in fact identical to a proposed EPA Block, which they are not, only six states 

have attempted one of the four blocks (and one of that number - Vermont - is not even subject to 

the program). Commenters said, only one state has undertaken two Blocks. Commenters said, 

two of the Blocks have never been undertaken in any state. Commenters said, forty-four U.S. 

states have taken no action related to any of the four EPA Blocks. Commenters said, thus, seven 

different and unrelated efficiency and renewable efforts in relatively small states are being used 

to suggest that as many as 190 completely new state programs dealing with coal unit efficiency, 

gas unit re-dispatch, mandated energy efficiency, and renewable energy construction targets are a 

matter of routine regulation.

Commenters stated, when all 50 states have never attempted even half of an identified control 

program (Blocks 1 and 2) and 46 and 47 states, respectively, have not demonstrated Blocks 3 and 

4, EPA cannot truthfully assert its "building blocks" are "adequately demonstrated" [or 

technically feasible in the case of Blocks 1 and 2] because they are each well-established in 

numerous states." Commenters said, nor can EPA assert that its Building Blocks are "currently in 

use for achieving CO2 emission reductions from existing fossil fuel-fired EGUs." Commenters 

said, in a regulatory setting with billions of dollars of assets and the livelihoods of millions at 

stake, it is beyond the bounds of even "arbitrary and capricious" behavior for an agency to assert 

enormously important and fundamental facts as true when they are demonstrably false.
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Response 12: See section V.B of the final rule preamble of the CPP for an explanation of our 

basis for why the building blocks are adequately demonstrated and the requirements that will 

apply to the affected EGUs.

Comment 13: Four building blocks operating together as a system are not adequately 

demonstrated

Commenters said, EPA has assumed that it is sufficient to assert that the individual building 

blocks are adequately demonstrated. Commenters said, this does not satisfy EPA's requirement 

to show that its BSER determination is adequately demonstrated. Commenters said, because 

EPA defined BSER to be the combination of the four Building Blocks, EPA has the burden of 

showing that such combination, at the emission reduction levels EPA asserts are possible, is 

technically feasible - and, more importantly, technically feasible while still assuring that the 

power sector can still meet its overarching obligation to provide reliable electricity to the public. 

Commenters said, EPA did not undertake this step, and instead simply added the estimated 

reductions achievable from the individual building blocks without assessing the impact of the 

BSER Building Blocks on each other or the interconnected power system. Commenters said, the 

Agency's determination, therefore, is not consistent with the statutory criteria of adequate 

demonstration, technical feasibility, costs, emission reductions and reliability concerns for 

finding a system to be BSER.

Commenters stated, the result is that EPA has set state goals that are not demonstrated to be 

achievable. Commenters said, EPA cannot have it both ways when it considers the 

interconnected power system: it cannot use the nature of the system to reach outside the affected 

fossil-based facilities in order to drive more stringent emission reduction targets, but then ignore 

the interconnected nature of that system by asserting that its BSER determination is adequately 

demonstrated as a technical matter without ever assessing the impacts on the system. 

Commenters said, this raises legal questions as to whether the particular BSER EPA has 

proposed meets the statutory requirements under the CAA.

Commenters stated, the proposed guidelines do not demonstrate that the four Building Blocks 

meet the legal criteria for BSER under section 111(a) because the Agency has not demonstrated 

the Building Blocks can achieve the proposed state goals when operated together as a system of 

emission reduction that is compatible with the technical, cost-effective, and reliable operation of 

the interconnected electric system.

Commenters stated, in the very section of the proposed guidelines justifying BSER as the 

combination of the four Building Blocks, EPA primarily argues that the state goals meet the 

relevant criteria. Commenters said, in so doing, EPA relies significantly on the flexibility it has 

provided to states by imposing only an emission goal and allowing the state to tailor application 

of emission reduction measures including but not limited to those that make up BSER. 

Commenters said, state flexibility to implement the emission limitation through other means is 
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important, but cannot be a shield against insufficient analysis of the proposed BSER measures 

used to set the emission goal in being able to meet that goal for affected units or on a statewide 

basis. Commenters said, in every section 111 rulemaking, regulated units clearly have the 

flexibility to take measures other than the specific BSER technology EPA has determined is 

adequately demonstrated, and EPA cannot bar states from taking verifiable, demonstrable and 

innovative measures to achieve reductions. Commenters said, it is EPA's responsibility, however, 

to evaluate the proposed BSER against the statutory criteria and determine that the BSER meets 

the statutory criteria. Commenters said, EPA has not done so in the proposed guidelines.

Commenters stated, EPA's proposed guidelines fail to adequately consider whether these 

Building Blocks work together as a system of emission reduction that is compatible with the 

technical, cost-effective, and reliable operation of the interconnected electric system. 

Commenters said, the proposed guidelines contain two short and largely repetitive sections 

ostensibly considering various combinations of the BSER blocks together. See 79 Fed. Reg. at 

34,877-78 and 85. Commenters said, however the discussion of these combinations is not 

sufficient. Commenters said, there is no analysis of the interactive effects of each of the Building 

Blocks when implemented together, nor is there analysis of changes in the cost of reductions or 

electric reliability impacts when the Building Blocks are combined. Commenters said, reliability 

impacts can have significant health and economic consequences that need to be included in the 

analysis.

Commenters stated, EPA assumes that each state can simultaneously expand significantly the 

usage of existing and under construction NGCC units, generate an increased quantity of 

electricity from renewable and nuclear power units, and avoid demand for electricity generation 

through end-use energy efficiency programs as part of BSER. Commenters said, that is, in 

calculating each state's goal as a combination of the Building Blocks, EPA has made implicit 

assumptions about the pace and timing of the future transformation of the electric system without 

considering practical constraints such as reliability obligations, natural gas pipeline capacity 

limits, competing demands from consumers for natural gas during the winter, delays in 

approving needed transmission infrastructure, among other practical considerations in 

implementing the proposed system.

Commenters stated, as courts reviewing EPA actions have explained, "an initial burden of 

promulgating and explaining a non-arbitrary, non-capricious rule rests with the Agency.... [B]y 

failing to explain how the standard proposed is achievable under the range of relevant conditions 

which may affect the emissions to be regulated, the Agency [will have] not satisfied this initial 

burden." Commenters said, this determination cannot be a "crystal ball inquiry." 

Commenters stated, yet, the EPA's justifications for its interpretation that the four Building 

Blocks, taken together, constitute the "best...adequately demonstrated" system that achieves the 

reductions proposed by the Agency are cursory. Commenters said, by expanding BSER to 

include a system-wide basis for regulation and determining potential reductions from fossilbased units, EPA commits itself to demonstrating that its BSER determination works in the 

context of that interconnected system. Commenters said, EPA has not done so, and the Agency's 
175

determination, therefore, is not consistent with the statutory criteria of adequate demonstration, 

technical feasibility, costs, emission reductions and reliability concerns for finding a system to be 

BSER.

Response 13: See section V.B of the final rule preamble of the CPP for an explanation of our 

basis for why the building blocks are adequately demonstrated and the requirements that will 

apply to the affected EGUs.

Comment 14: Commenters said, with regard to the alternative approach to BSER, EPA asserts 

that reduced utilization is "adequately demonstrated" because affected EGUs can "adjust their 

own generation," states can "impose requirements," and "other entities that operate in the various 

types of markets in the states can be expected to respond to the reduction in generation from the 

fossil-fuel fired EGUs by undertaking the measures in the building blocks or other actions that 

would assure reliability." Commenters said, but this, to some extent, begs the question. 

Commenters said, EPA does not point to any state that is currently utilizing every building block, 

combined, in the manner and at the levels proposed in the Clean Power Plan. Commenters said, 

EPA does not point to any state that has imposed operating restrictions on affected EGUs at the 

levels that would have to be imposed to meet EPA's proposed carbon intensity goals. 

Commenters said, EPA asserts that each building block, by itself, has worked in some state at 

some point, and thus assumes that they will work in combination. Commenters said, but an 

assumption is not a demonstration. Commenters said, EPA has not shown that either variation of 

its building block BSER is "adequately demonstrated." Commenters said, most notably, Regional 

Greenhouse Gas Initiative ("RGGI") - the program EPA most heavily cites - does not rely on the 

Agency's Building Blocks nor has that program demonstrated the level of reductions required by 

EPA.

Response 14: See section V.B of the final rule preamble of the CPP for an explanation of our 

basis for why the building blocks are adequately demonstrated and the requirements that will 

apply to the affected EGUs.

Comment 15: Commenters asserted that the proposed BSER is not a product of "reasoned 

decision making," as defined by case law. 

Commenters stated, the proposed rule is prohibited because the Administrator's determination 

that the proposed BSER has been adequately demonstrated, as required by the CAA, is 

unfounded. 

Commenters said, the court elaborated on this notion of reasonableness, stating: "in subjecting 

the Administrator's actions to judicial review we apply a test of reasonableness," and "our 

'expertise' is not in setting standards for emission control but in determining if standards as set 

are the result of reasoned decision making.'" Id. at 434. Commenters said, reasoned decision 
176

making requires an agency to "examine the relevant data and articulate a satisfactory explanation 

for its action[s]." Motor Vehicles Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 

(1983).

Commenters stated, EPA's proposed building block system is not the product of the necessary 

"reasoned decision making," as required by Essex, because EPA relies on flawed data, improper 

modeling, and draws a conclusion not justified by the data. Commenters said, as a result, the 

state standards that EPA sets forth are not at all a reflection of real-world conditions in a given 

state, but merely an amalgam of national projections applied to that state's energy fleet. 

Commenters said, in employing this strategy, EPA has not exercised "reasoned decision 

making." Id.

Commenters added, in fact, in the proposed Modified and Reconstructed Source Rule, EPA 

specifically states that it believes the most efficient generation technology available for large 

sources is SCPC and sets this technology as BSER for reconstructed sources. Commenters said, 

it makes no logical sense for the EPA to argue in one proposed rule that BSER is a single 

technology applied to a single source yet in another, related proposed rule, argue that BSER is a 

multitude of practices applied to a multitude of sources and non-sources when both rules propose 

a standard of performance for the exact same pollutant.

Commenters added, EPA has created a system premised on the "integrated grid" and then torn 

off pieces, one by one. Commenters said, hydro, a zero-emitting source like wind and solar, is 

not included. Commenters said, EPA includes some nuclear but not all of it. Commenters said, 

EPA includes non-generation - energy efficiency and demand response - converting it to 

generation. Commenters said, but all of these contortions distort the initial determination that the 

integrated grid can be treated as a single unit. Commenters said, EPA's decision making process 

simply creates compliance risk, is not an incentive, and fails to set a compliance glide path for 

the states that is achievable.

Response 15: See section V.B of the final rule preamble of the CPP for an explanation of our 

basis for why the building blocks are adequately demonstrated and the requirements that will 

apply to the affected EGUs.

As discussed in section I.A of the final rule preamble, the interim compliance period has been 

adjusted to begin in 2022, we have provided states with flexibility with respect to the glide path, 

and “early” emissions reductions achieved between 2012 and 2022 can be accounted for in 

demonstrating compliance.

Comment 16: BSER for CO2 from Existing Power Plants Does Not Exist. 

Commenters said, per section 111(d), states are to adopt ESPS for "particular sources." 

Commenters said, per EPA's 1974 and 1975 procedural regulations, ESPS apply to "designated 

pollutants" from "designated facilities." Commenters said, EPA has promulgated only five 
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111(d) ESPS rules since Congress amended the CAA in 1970. Commenters said, in each case, 

following the Act's plain language and the implementing regulations, EPA required states to 

adopt ESPS for "designated air pollutants" from "designated facilities" (e.g. acid mist from 

sulfuric acid production plants). Commenters said, and in each case, BSER consisted of one or 

more facility-specific technologies.

Commenters stated, from those elementary facts alone, the unlawfulness of the CPP is evident. 

Commenters said, economical technologies to capture or filter CO2 emissions from existing 

power plants do not exist. Commenters said, EPA claims partial CCS is the adequately 

demonstrated BSER for new coal power plants - a highly dubious proposition, as explained 

above. Commenters said, but EPA acknowledges that retrofitting existing coal power plants with 

CCS is too costly to pass muster as "adequately demonstrated." Commenters said, EPA also 

states that CCS is not an economic technology for NGCC power plants.

Commenters stated, EPA, however, refuses to face the obvious implication of those assessments: 

There is no "adequately demonstrated" BSER for CO2 emissions from existing power plants. 

Commenters said, hence, the agency may not lawfully regulate CO2 emissions from existing 

power plants under section 111(d).

Commenters stated, the CPP unlawfully defines BSER as a wish-list of 'green' energy policies. 

Commenters said, to improvise around the fact that "demonstrated" technologies to control CO2 

emissions from existing sources are not available, the CPP proposes to define BSER as a mix of 

policies for changing how electricity is produced, managed, and consumed in each state.

Response 16: See section V.B of the final rule preamble of the CPP for an explanation of our 

basis for why the building blocks are adequately demonstrated and the requirements that will 

apply to the affected EGUs.

Comment 17: Commenters stated, Building Block 2 assumes that all existing NGCC units can 

achieve a capacity factor of 70%. Commenters said, this assumption is based on historical 2012 

data which showed that a specific subset of natural gas combined cycle power plants operated at 

a capacity factor of 70% or greater. Commenters said, this too is an erroneous assumption to 

extrapolate to all NGCC units. Commenters said, it is not accurate to assume that all NGCC units 

can operate at this capacity factor because of the impact of outside variables such as natural gas 

availability that can affect this percentage.

Commenters stated, Building Block 3 includes renewable energy goals that are theoretical 

because they are based upon regional averages instead of a state's actual capabilities. 

Commenters said, in addition, the inclusion of under construction nuclear is not treated in the 

same manner as renewables. Commenters said, EPA categorizes both nuclear and renewables as 

options that are less-carbon intensive generating capacities. Commenters said, however, EPA 
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considers future aspects that could impact renewables but does not include a similar assessment 

when including nuclear under construction.

Commenters stated, these points reveal that BSER has not been "adequately demonstrated". 

Commenters said, to be adequately demonstrated means that these systems for emission 

reductions have in some manner shown measurable reductions in emissions previously. 

Commenters said, while it is obvious that Energy Efficiency programs do reduce energy demand, 

there has been no approved method for quantifying these reductions.

Commenters said that EPA failed to adequately demonstrate that co-firing with natural gas at 

coal-fired EGUs represents BSER. Commenters stated, "effective" RE generation in 2020 is an 

estimated value by EPA and has not been "adequately demonstrated" as required within the 

BSER definition. 

Response 17: See section V.B of the final rule preamble of the CPP for an explanation of our 

basis for why the building blocks are adequately demonstrated and the requirements that will 

apply to the affected EGUs.

Comment 18: Commenters said historical, an individual measure, or even collective measures, 

does not demonstrate that the collective measures are technically feasible in the specific manner 

EPA prescribes or at the levels EPA assumes. Commenters said that if Congress intended the 

required analysis to be so simplistic, then there would be no need for regulation at all, because 

the regulation would do no more than codify what is already in practice.

Commenters said that, EPA's proposed rule goes far beyond how these measures are used in 

practice today, and EPA cannot merely point to historical use to prove the feasibility of its 

proposed system. Commenters said EPA's analysis fails to show the regulation is technically 

feasible. 

Commenters said that, EPA has not demonstrated that its BSER is technically feasible, because it 

has not shown that the natural gas infrastructure is capable of meeting the natural gas demand. 

Commenters said that, EPA asserts that Arizona can switch all electrical demand currently met 

with coal-fired EGU's to existing NGCC capacity to meet Arizona's interim goal by 2020. 

Commenters said that such a large shift in capacity will require natural gas infrastructure 

improvements, and EPA does nothing more than quote past history on the rate of pipeline 

expansion in the U.S. to justify the technical feasibility of meeting an increased natural gas 

demand in Arizona and throughout the U.S. Commenters said while history can be instructive, 

the mere fact that it was done before, cannot prove that it can be done again. Commenters said 

EPA's analysis is conclusory and fails to address numerous aspects of the technical feasibility of 

such a large supply shift. 
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Commenters said that first, even assuming that infrastructure improvements are feasible, EPA 

fails to provide any information on the time needed to obtain rights of ways and permit 

authorizations, to conduct environmental assessments, and to obtain bank financing, etc. before 

actual expansion can begin. Commenters said that these delays will hinder or prevent industry 

from meeting an increased natural gas demand on EPA's timetables. 

Commenters said that, second, with regards to its IPM feasibility modeling, EPA used 2012 

utilization rates to model the capacity in the system for supply shifts. Commenters said that 2012 

was the lowest utilization rate in the past 10 years, and is not representative of an electric utility 

system under full demand load. Commenters said that, EPA's reliance on the modeled outputs 

does little to prove its theory. 

Commenters said that, third, EPA bases its NGCC capacity analysis on the fact that NGCC 

operate at higher levels at certain times, and assumes that it could operate in a sustained fashion 

at this level without risks to pipeline or transmission capacity. Commenters said that, the pipeline 

capacity is a delicate balance of storage and peak shaving and because a demand level is met 

during a certain hour of the day, potentially through peak shaving and linepacking, does not 

provide evidence that the transmission system can sustain this level of capacity for prolonged 

periods.

Commenters said that, fourth, EPA does nothing more than provide EIA data on current pipeline 

capacities in the U.S. without providing any information on the amount of residual capacity or 

the capacity necessary to meet EPA's 70% national NGCC capacity load shift; and, EPA 

certainly does not show that capacity exists to handle the load shift in Arizona. Commenters said 

that actual available capacity may be far below 100% of named capacity due to bottlenecks in the 

system. Commenters said despite the enormous complexity of the system, there was no evidence 

in the docket that EPA even consulted with FERC, US DOT Office of Pipeline Safety, or the 

Arizona Corporation Commission (ACC) agreed with EPA's assumptions. Commenters said that 

EPA also fails to consider any other infrastructure expansion needs such as trunklines, 

compressor stations, peaking storage, etc.

Commenters said that, without conducting a thorough assessment of the actual capacity 

expansion required to meet EPA's projected demand shift, and the time required to build this 

capacity, EPA failed to show that its proposed BSER is technically feasible. 

Commenters said that EPA has not demonstrated that its BSER is technically feasible, because it 

has not shown that its building blocks achieve continuous emissions reductions. 

Commenters said that, EPA's approach of citing "historical use" to show technical feasibility of 

its "system" lacks an essential link to the requirement that the standard of performance reflect an 

emission limitation "a limit on the quantity, rate or concentration of emissions of air pollutants 

on a continuous basis" 42 U.S.C 7602. Commenters said a technology may be technically 

feasible with regards to producing some degree of emissions reduction, it may not be technically 

feasible as a means to generate continuous emissions reduction. Commenters said that, since the 
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CAA requires continuous emissions reductions, EPA must consider technical feasibility in this 

context. 

Commenters said that, EPA readily admits that "renewable EGUs such as wind and solar units" 

generally operate when wind and sun conditions permit rather than at operators' discretion. 

Commenters stated through this admission, EPA demonstrates the technical infeasibility of 

renewable energy to serve as a continuous emission reduction measure. Commenters said that 

this is because the measure cannot provide a continuous assurance of emissions reductions and it 

can only reduce emissions when operating; it can only operate when weather conditions are 

favorable. Commenters said that the DC Circuit held that a measure must be "reasonably 

reliable," and in the context of a requirement for "continuous" emissions reductions, renewables 

lack this reasonable reliability because the amount of emissions reductions expected from the 

measure vary over time, and a State cannot reliably quantify the emissions reduction in advance.

Commenters said that, the demand-side management lacks "reasonable reliability" of generating 

continuous emissions reductions. Commenters said that Building block 4 would rely on supply 

side decreases in electricity demand to generate emissions reductions. Commenters said that, 

many demand-side changes are temporal in nature. Commenters said that a residential customer 

might agree to maintain a household thermostat at 68 degrees during winter months, but this 

"reduction" is dependent on external temperatures and the length of the winter season. 

Commenters said that this same customer could, in fact, fail to manage energy use during other 

months and negate any benefits gained during winter months. Commenters said that an industrial 

customer might agree to reduce production during high demand periods, but the "reduction" only 

lasts for the time of the high load demand. Commenters said that while these measures are 

effective in creating emissions reductions, the reduction is temporal and lacks the permanency 

and predictability to make the measure "reasonably reliable" for purposes of establishing a 

section 111 emission standard guideline.

Commenters said that, EPA assumes that the demand side reduction will reduce "fossil fuel" 

EGU demand, but without mapping the entire electrical system, EPA lacks the accountability to 

know whether the reduced demand results in actual reductions from a fossil fuel fired EGU or 

some other form of energy generation. Commenters said that, given the integrated nature of the 

electricity grid, EPA is unable to determine if a demand-side measure implemented will affect 

electric demand from utilities. Commenters said that, EPA has not demonstrated that block 4 

measures are technical feasible in the sense of creating reliable and continuous emissions 

reductions from fossil fuel EGUs.

Response 18: See section V.B of the final rule preamble of the CPP for an explanation of our 

basis for why the building blocks are adequately demonstrated and the requirements that will 

apply to the affected EGUs.
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Comment 19: EPA's approach to under construction nuclear violates CAA section 111(d).

Commenters stated while nuclear power has been demonstrated to be a proven source of safe, 

affordable, reliable, and clean energy, the EPA has provided no support in the record for its 

conclusion that these under construction nuclear units are already "adequately demonstrated" as 

that statutory term is intended in the special context of section 111(d). Commenters said the five 

under construction nuclear power units do not even fall within the interpretation of "adequately 

demonstrated" set forth in the EPA's own legal memorandum accompanying the NPRM, which 

states: "the measures in each of the building blocks are 'adequately demonstrated' because they 

are each well-established in numerous states, many of them have already been relied on to reduce 

air pollutants, including CO2, from fossil fuel-fired EGUs and, as noted, they may be undertaken 

by the affected EGUs or, in general, required by the states." Commenters stated this legal test, set 

forth by the EPA, is not met by the five units at issue. Commenters stated later in the same legal 

memorandum, the EPA offers a somewhat different interpretation of "adequately demonstrated," 

asserting the measures in building blocks 2, 3, and 4 are "adequately demonstrated" because 

"they have already been implemented in many states, and because they may be undertaken by the 

affected EGUs in the regulated markets in which they operate, or may be implemented by the 

states in the state plans." Commenters said nonetheless, the five units that remain under 

construction do not meet this test either, as they have not "already been implemented in many 

states," nor have they been "undertaken by the affected EGUs in the regulated markets in which 

they operate." Commenters stated it is quite revealing that the section of the EPA's legal 

memorandum detailing the "basis for adequately demonstrated finding" fails to even mention 

nuclear energy or these five specific units that are under construction.

Response 19: See section V.B of the final rule preamble of the CPP for an explanation of our 

basis for why the building blocks are adequately demonstrated and the requirements that will 

apply to the affected EGUs.

Comment 20: Approaches taken by states and power companies reflect the integrated nature of 

the power sector Commenters stated, the best system of emission reduction identified in the 

Clean Power Plan reflects the approaches taken by states and power companies across the 

country to reduce carbon and other harmful air pollutants use mechanisms that reflect the 

integrated nature of the power sector. Commenters said, across the country, states and companies 

are taking system-based approaches to achieve carbon pollution reductions, with a long track 

record of successful implementation. Commenters said, these programs are cost-effective and 

enable significant reductions because they take advantage of the unique opportunities for 

emission reductions provided by the interconnected electric grid. Commenters said, in fact, 

proven techniques for controlling GHGs that approach EGUs as part of an integrated system are 

the dominant approach for controlling EGU emissions of GHGs.

Commenters stated, one of the most widespread and oldest approaches for states to reduce power 

sector emissions is the Renewable Portfolio Standard (RPS). Commenters said, as captured in the 
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following chart, twenty-nine states and the District of Columbia have enacted RPSs, beginning in 

1983. Commenters said, in many of these states, RPS requirements have been in force for ten or 

more years. Commenters said, there is also significant variation in program design among the 

RPS; states have made different decisions about key RPS features, such as resource eligibility, 

the program target, set-asides, and flexibility mechanisms. Commenters said, the long experience 

with different kinds of RPS has allowed policymakers to understand best practices for RPS 

design. Commenters said, in particular, the best practices guide states in developing programs 

that are enforceable, consistent with the structure of the electricity market, socially beneficial, 

cost-effective, flexible, and predictable. Commenters said, RPS have had a significant impact on 

GHG emissions from the power sector. Commenters said, several RPSs are slated to become 

even more stringent in coming years, leading to even greater reductions. 

Commenters provided Figure 1 (titled: "Timeline of RPS Enactment and Initial Requirements"), 

which illustrates RPS enacted timeline for States, including year of first requirement by State; 

the figure also illustrates when major RPS revisions were made by State.

Commenters stated, several studies have documented the ability to expand on these historical 

successes by integrating much more renewable energy on the grid. Commenters said, a recent

study of the PJM system found that it will not have any significant issues operating with wind 

and solar generation providing up to 30% of its energy. Commenters said, in every scenario 

examined, integrating renewables into the PJM system would lead to lower operation and 

maintenance costs and a lower locational marginal price of electricity (which reflects the cost of 

generation and transmission), while reduction in CO2 emissions relative to business as usual 

would range from 12% to 41%. Commenters said, a study commissioned by the Minnesota 

Department of Commerce and conducted in coordination with the Midcontinent Independent 

System Operator (MISO) has found the state of Minnesota could obtain 40% or more of its 

electricity from wind and solar energy without suffering any grid reliability issues. Commenters 

said, accordingly, grid operators around the country are poised to duplicate the success of the 

RGGI region, which demonstrated the ability to dramatically increase its use of renewable 

generation while maintaining grid reliability. 

Commenters stated, another well-demonstrated state policy for reducing GHG emissions from 

the power sector as a whole is the energy efficiency resource standard (EERS). Commenters 

said, currently, twenty states have an EERS and an additional seven states have energy efficiency 

goals. Commenters said, as with RPSs, states have taken a variety of approaches in designing 

EERSs that meet specific state needs. Commenters said, key policy-design elements include the 

stringency of the standard, flexibility mechanisms, and methodology for measuring savings. 

Commenters said, almost all the current EERSs were enacted five or more years ago. 

Commenters said, over this time, these policies have proven to be an achievable means of 

reducing emissions from the power sector. Commenters said, and the diversity of EERS design 

has allowed stakeholders to analyze best practices. Commenters said, the Institute for Electric 

Innovation recently found that if rate-payer funded energy efficiency programs continue to grow 

at trend, they will reduce total U.S. electricity use by 5.9% by 2025. 
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Commenters stated, energy efficiency programs are especially suitable for wide-scale 

deployment because they present an enormous opportunity for cost-savings. Commenters said, 

investments made to meet state energy efficiency targets regularly save customers over $2 for 

every $1 invested, and in some cases up to $5. Commenters said, for example, the largest utility 

in Minnesota, Xcel energy, reported that its energy efficiency programs in 2012 alone would 

provide a net benefit of $376 million to its electricity customers. Commenters said, across the 

country, there are many money-saving energy-efficiency opportunities that are yet to be realized. 

Commenters said, in 2010, National Academy of Science reported that full deployment of costeffective energy-efficiency technologies in buildings would eliminate the need to add new 

generation capacity. Commenters said, this study identified opportunities to reduce power 

consumption in residential and commercial buildings that (together) would save over 1,200 TWh 

in 2030 and yield a return on investment in less than three years. Commenters said, another 

recent report identified building retrofit opportunities with the potential to mitigate more than 

600 million metric tons of CO2 per year, returning more than one trillion dollars in energy 

saving over ten years on a $279 billion dollar investment. Commenters said, the many 

opportunities for reducing power-sector emissions through energy efficiency give states a range 

of well-demonstrated options for inclusion in their state plans. 

Commenters stated, where energy efficiency resources compete on the market, it is clear that 

they are a cost-effective way to meet consumer needs while reducing power-sector GHG 

emissions. Commenters said, over the past decade, efficiency has remained the least-cost 

electricity option; with an average cost of 2.8 cents per kilowatt hour, energy efficiency 

programs are about one-half to one-third the cost of new electricity generation options. 

Commenters said, in some regions, efficiency is beginning to feature in forward capacity markets 

directly competing for the right to meet the capacity needs of the electric grid. Commenters said, 

comparing the cost of energy efficiency and affected-source generation in this context clarifies 

the interconnected nature of the electric system and the appropriateness of taking a system-based 

approach to reducing GHG emissions from EGUs.

Commenters stated, individual states have crafted strategies for reducing power-sector emissions 

that combine several tailored policies. Commenters said, in Colorado, emissions reductions are 

being driven by the Clean Air - Clean Jobs Act, an energy efficiency standard, and a renewable 

energy standard. Commenters said, the Clean Air - Clean Jobs Act required Colorado's utilities 

to propose plans for achieving integrated multi-pollutant reductions from coal-fired power plants, 

prompting utilities like Xcel Energy design systems-based plans that shift generation to cleaner 

sources. Commenters said, the Act has enormous public health benefits and is expected to create 

about 1,500 jobs during the construction of cleaner facilities. Commenters said, Illinois also has 

a unique suite of policies with proven results; Illinois has an energy efficiency standard that 

requires utilities to save two percent of electricity annually by 2015 and reduce rate-payer 

spending, an RPS that requires 25 percent of electricity to come from renewables by 2025 and 

drives a booming local economy in wind energy, and has required any new coal-fired power 

plants to capture and store some of their carbon emissions. 
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Commenters stated, the nine states participating in the Regional Greenhouse Gas Initiative 

(RGGI) have already demonstrated that a systems-based approach to reducing power sector 

GHG emissions can achieve vast reductions with economic benefits. Commenters said, since 

2005, the RGGI states have reduced their power sector CO2 emissions by 40 percent, while the 

regional economy has grown 7 percent. Commenters said, the RGGI states now have nearly six 

years of experience with a fully operational carbon market. Commenters said, even during the 

first three years of the RGGI cap-and-trade program, the mandatory system had been functioning 

properly and seamlessly introducing a carbon price into the electricity market. Commenters said, 

experience with RGGI demonstrated that not only that the initial system-wide targets were 

achievable, but that even more ambitious targets were within reach: in 2013, the RGGI states 

lowered the program' emissions cap by 45 percent, starting in 2014. 

Commenters stated, RGGI's enormous economic benefits demonstrate that integrating energy 

efficiency into power-sector GHG-reduction is not just available, but an economic boon. 

Commenters said, during the first three years of its cap-and-trade program, RGGI added $1.6 

billion in economic value to the ten-state region. Commenters said, in general, this positive 

impact results from the injection of carbon-allowance revenue into the economy and consumer 

savings on energy. Commenters said, during this three-year period, RGGI state investments in 

energy efficiency created about 16,000 "job years." Commenters said, electricity consumers 

(including households, businesses, government users, and others) saved nearly $1.1 billion 

overall because investments in energy efficiency lowered prices, outweighing some near-tern 

increases in electricity prices. 

Commenters stated, RGGI also demonstrates that systems-based approaches to reducing power 

sector emissions can boost local economies-even in states that heavily rely on coal-fired 

generation. Commenters said, in the first three years of the RGGI cap-and-trade program, every 

RGGI state experienced net positive benefits from RGGI and job growth. Commenters said, the 

states in the more coal-reliant PJM region-Delaware, Maryland, and New Jersey-added $341 

million in value and 3,676 job years. Commenters said, consumers also realized significant bill 

savings in these three states, as longer term savings in electricity and energy bills offset the 

minor increases (0.7 percent) in electricity bills during 2009-2011. Commenters said, RGGI 

states may be able to improve upon this impressive track record in the future, as the first three 

years of the program provided an important opportunity for identifying best practices for using 

allowance revenue and designing energy efficiency programs. 

Commenters stated, another part of RGGI's success has come from shifting from high-emitting 

to lower-emitting sources of generation. Commenters said, from 2005 to 2012, coal-fired 

generation declined from 23% of the regional generation mix to 9%. Commenters said, in the 

same period, the share of natural gas-fired generation rose from 25% to 44%. Commenters said, 

between 2005 and 2012, the RGGI states also increased in-region, non-hydroelectric renewable 

generation by 47 percent. Commenters said, this dramatic growth in renewables is driven by a 

combination of complementary policies: RPSs, net metering tariffs, long-term contracting, the 

establishment of "Green Banks," innovative green financing mechanisms, and renewable energy 
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technology grant programs. Commenters said, these shifts in generation were able to occur 

without any disruption to consumers because the power sector functions as an integrated system.

Commenters stated, when utilities have designed GHG reduction programs, they too have 

adopted successful systems-based approaches. Commenters said, these approaches vary widely, 

but generally combine a shift toward lower-emitting generation with increased energy efficiency. 

Commenters said, the following examples illustrate the GHG reduction strategies that have been 

successfully demonstrated on the ground:

-In 2001, Entergy set a goal of stabilizing GHG emissions for its power plants at 2000 levels 

through 2005 and, after achieving its initial goal, the company strengthened its goal to 

stabilize emissions at 20 percent below 2000 levels. Entergy was successful, in part, due to 

upgrades and efficiency improvements at existing facilities. 

-Public Service Enterprise Group (PSEG) set a goal of reducing its GHG emissions by twentyfive percent and achieved its goal in 2011, 14 years ahead of schedule. PSEG's multi-pronged 

efforts include deploying energy efficiency, increasing nuclear power output, building efficient 

natural gas plants, and investing in renewable energy production. From 2000-2011, PSEG 

increased electricity generation by 37 percent while simultaneously reducing its CO2 emissions 

rate 24 percent. 

-From 2000-2011, NextEra Energy's CO2 emissions rate declined by approximately 40 percent 

while its power generation increased by almost 90 percent. This achievement has been mainly 

driven by greater energy efficiency in its generation facilities and its large renewable portfolio. 

One of NextEra Energy's subsidiaries is also a leader in demand-side management. 

-In 2008, Exelon set a goal of abating 15.7 million metric tons of GHG emissions by 2020 (the 

equivalent of its total GHG emissions in 2001 and then increased) and increased its abatement 

goal to 17.5 million metric tons after its 2012 merger with Constellation Energy. Exelon has 

already exceeded its revised goal through a combination of measures. Exelon achieved more than 

half of its goal by increasing production at existing nuclear plants through updates and other 

operation efficiency, reducing the need for fossil-fired generation. The second most significant 

source of Exelon's reductions were programs that helped its customers use electricity more 

efficiently. 

Commenters stated, municipal utilities have also had proven success with systems-based 

approaches to reducing power sector GHG emissions. Commenters said, CPS Energy, the 

nation's largest municipally owned electric and gas utility, has reduced its CO emissions rate by 

seven percent from 2000-2011, as power generation increased 36 percent. Commenters said, 

while CPS Energy maintains a diverse electricity mix that includes wind, solar, natural gas, coal, 

and nuclear, it has achieved substantial emissions reductions by deactivating two older coal 

units, increasing renewable generation, and implementing energy efficiency programs. 

Commenters said, the utility is also on track to reach its ambitious energy-saving goal-771 MW 

of electricity by 2020-through a program that includes rebates for rooftop solar power, 
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commercial lighting and HVAC retrofits, free energy efficiency measures for low-income 

households, and new home construction. Commenters said, Austin Energy, the eighth largest 

public power utility in the United States, has implemented demand-side management (DSM) 

programs since 1982. Commenters said, in total, Austin Energy's energy efficiency programs 

have saved about 1.8 billion kWh since 1982. Commenters said, Austin Energy's combination of 

DSM and increased renewable generation has allowed it to serve a rapidly growing population 

without increasing its CO2-emitting generating capacity over the past 20 years. 

Commenters stated, one of the most common ways that electric utilities structure their analysis 

of options for reducing GHG emissions is by considering a carbon price in an Integrated 

Resource Plan (IRP). Commenters said, a 2011 study of best practices in integrated resource 

planning that examined the IRPs of fifteen utilities operating across the United States found that 

carbon costs were among the variables most commonly considered in assessing available 

portfolio strategies. Commenters said, accordingly, the study determined that one of the "key 

components" of integrated resource planning was "[a] Portfolio Strategy Assessment evaluat[ing] 

the cost / risk tradeoff of potential strategies as natural gas prices and carbon costs varied." 

Commenters said, this component was present, for example when an IRP identified alternative 

mixes of supply-side resources with comparable reliability and then "[c]onducted Monte Carlo 

analysis assessing total supply cost for each portfolio over the twenty ear planning horizon with 

varying gas and carbon prices." Commenters said, an in-depth 2008 study of the IRPs of fifteen 

utilities in the Western United States (accounting for about 60% of retail electricity sales in the 

West) illustrates the varying methodology for considering carbon costs. Commenters said, all but 

one of the fifteen utilities in the sample incorporated a future carbon tax or cap-and-trade system 

into their portfolio analysis, confirming that consideration of carbon costs in IRPs is common 

practice. Commenters said, but crucially, "[e]leven of fifteen utilities included carbon emission 

prices in their base-case scenario, thereby affecting their choice of preferred portfolio, to the 

extent that the choice was based on a comparison of candidate portfolios "expected costs." 

Commenters said, analyzing scenarios with different carbon prices allows the utilities to reduce 

risk by shifting from high-emitting sources to lower-generating sources. Commenters said, 

"based on the results under its high carbon price scenario, PSCo selected a preferred portfolio 

that replaces four existing coal-fired units (~200 MW nameplate capacity) with a new CCGT." 

Commenters said, for a variety of economic and compliance reasons, utilities are shifting toward 

renewable generation and energy efficiency to meet consumer needs. Commenters said, in 

addition to IRPs, utilities can consider carbon costs in any investment decision framework. 

Commenters said, National Grid factors a social cost of carbon of about $50 per ton of CO into 

all capital project decisions. 

Commenters stated, regardless of what factors are driving power company choices, their 

decisions to shift from high-emitting generation to lower-emitting generation demonstrate the 

availability of this GHG-reduction option. Commenters said, power companies that once met a 

majority of customer demand with coal-fired generation have drastically reduced their reliance 

on coal. Commenters said, for instance, in 2005, Southern Power and its affiliates generated over 

60 percent of their electricity from coal and 10 percent from natural gas. Commenters said, in 
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2013, Southern Power generated about 40 percent of its power from coal and 34 percent from 

natural gas. 

Commenters stated, in addition, there are numerous demonstrated systems-based approaches for 

reducing criteria pollutant emissions from EGUs. Commenters said, perhaps most notably, Title 

IV of the Clean Air Act established a successful market-based program to control EGU 

emissions that contribute to acid rain, setting a permanent cap on the total amount of SO2 that 

may be emitted by EGUs nationwide. Commenters said, states and local governments also 

implement energy efficiency programs to improve local air quality as part of the SIP process. 

Commenters said, these programs are effective because decreases in electricity demand reduce 

EGU emissions through the interconnected electricity system. Commenters said, further, since 

1998, each of EPA's rules to address the interstate transport of pollution from EGUs has 

incorporated energy efficiency compliance options; of these, the NOx SIP Call also provided a 

renewable energy compliance option. Commenters said, taken together, these EPA and state 

programs have long demonstrated the ability of systems-based approaches to reduce power 

sector emissions, while providing flexibility and reducing compliance costs.

Response 20: This comment is supportive of the overall approach the EPA is taking to the BSER 

and contains useful information that we incorporate into the record of this rulemaking, although 

we are not finalizing the measures in building block 4 as part of the BSER.

Comment 21: Commenters stated that City Utilities does not feel EPA has adequately shown 

that the nation's energy infrastructure (both primary and secondary) is capable of accommodating 

the sweeping changes in the time frame dictated. Commenters said this is an integral factor in 

establishing that the technological "system" ensconced by the proposal is adequately 

demonstrated.

Response 21: We disagree with commenters. For a comprehensive discussion of our basis for 

why the building blocks are adequately demonstrated and the requirements that will apply to the 

affected EGUs, please see preamble section V.B. and the GHG Mitigation Measures TSD.

Comment 22: EPA Cannot Arbitrarily Define BSER to Significantly Curtail or Retire Existing 

Lignite-Fueled Electric Generating Units

Commenters stated that EPA identifies four building blocks which it characterizes as "adequately 

demonstrated" because "they are each well-established in numerous states ...." Commenters said 

there are several underlying assumptions regarding the use of the building blocks that prevent 

EPA from stating that they have been "adequately demonstrated," including:1) EPA's assumption 

that electrical power is fully fungible across the grid such that any generating source can freely 

supplant generation from another; 2) the ability of states to "require" the construction of new 

energy sources and transmission infrastructure at will; and 3) the ability of industry to build and 
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install the necessary new infrastructure. Commenters cited description in EPA's Legal 

Memorandum:

"All of these measures [the four building blocks] are components of a 'system of emission 

reduction' for the affected EGUs because they either improve the carbon intensity of the affected 

EGUs in generating electricity or, because of the integrated nature of the electricity grid and the 

fungibility of electricity and electricity services, they displace or avoid the need for generation 

from those sources and thereby reduce the emissions from those sources. Moreover, those

measures may be undertaken by the affected EGUs themselves and, in the case of building 

blocks 2, 3, and 4, they may be required by the states." 

Commenters stated that the LEC submits that none of the four building blocks have been 

adequately demonstrated in the Proposed Rule, and are likely not achievable in the time frames 

required by EPA. Commenters said that while EPA will receive detailed comments from LEC 

members and other parties with which the LEC is aligned, the LEC summarizes certain concerns 

pertaining to the EPA building blocks further in the attached technical comments.

Commenters stated that the LEC strongly disagrees with EPA's underlying assumption about the 

fungible nature of electricity because it is not accurate. Commenters said as a consequence, 

EPA's underlying assumption that power from coal-fueled EGU's can always be replaced with 

renewables or natural gas because electricity across the grid is fully fungible is not true. 

Commenters said it is not adequate to assume, as EPA does, that new power generation and 

transmission infrastructure can be built to comply with the Proposed Rule because "the states can 

require it." Commenters said that nowhere in EPA's Proposed Rule or supporting documentation 

is there an analysis of state law supporting the assertion that all fifty states can compel generating 

entities to construct, site, locate, build, operate and maintain new power sources to replace load 

lost from existing EGU's. Commenters said that if electricity is not fully fungible, and if actual 

transmission barriers exist, providers may have no reasonable alternative but to retire lignitefueled generation assets and leave gaps in the grid that no other party is reliably able to fill at 

reasonable cost.

Response 22: We disagree with these comments. We explain in section V.B of the final rule 

preamble of the CPP why building blocks 1, 2, and 3 qualify as the BSER (and why we are not 

relying on building block 4 as part of the BSER). The GHG Mitigation Measures TSD also 

includes a comprehensive discussion of the building blocks. We also explain in the preamble and 

supporting documents that affected EGUs are able to implement each of the building blocks and 

that the rule will not adversely affect reliability. Finally, as we explain in sections V.A. and V.B. 

of the preamble, our emission guidelines simply reflect an achievable emissions limit through the 

application of the BSER and do not in themselves require states or sources to implement the 

BSER. That is, EPA is responsible for determining the level of emission limitation from the 

source category, while states have the responsibility of assigning emission requirements to their 

sources that will ensure their achievement of that level of emission limitation. States may fulfil 

their responsibility by establishing emission standards or creating plans consistent with the 

guidelines. In doing so, states will be able to choose from a wide range of emission reduction 
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measures, including measures that are not part of the BSER. No state is required to order an 

entity that it does not have authority over to construct, site, locate, build, operate and maintain 

new power sources to replace load lost from existing EGU's.

Comment 23: BB2, BB3, BB4 not adequately demonstrated 

Commenters stated, any standard of performance under section 111 of the CAA must be 

achievable for individual sources based on measures implemented at the source itself. 

Commenters said, currently, the only available measures that meet this requirement and that have 

been adequately demonstrated are certain heat rate improvement measures described as part of 

Building Block 1 in this rulemaking. Commenters said, if EPA is not satisfied with the CO2 

emission reductions that would be available from basing an emission guideline on these 

measures, then the Agency should postpone this rulemaking in order to provide more time for 

research, development, and commercial demonstration of other CO2 emission control 

technologies that could achieve greater reductions. Commenters said, additional time may allow 

EGU owners to develop and refine new methods of reducing CO2 emissions at reasonable cost 

in a way that can be translated to the source category as a whole. Commenters said, the 

appropriate way to foster such innovation is by providing an environment of regulatory 

flexibility, not by subjecting sources to overly stringent emission control requirements that 

discourage investment and experimentation with new and unproven control technologies, as the 

Agency proposes to do here.

Response 23: We agree with this comment insofar as it states that building block 1 measures are 

adequately demonstrated. However, we disagree with the remainder of this comment. We 

explain in section V.B of the final rule preamble of the CPP why building blocks 1, 2, and 3 

qualify as the BSER (and why we are not relying on building block 4 as part of the BSER). We 

also explain in the preamble and supporting documents that affected EGUs are able to implement 

each of the building blocks and that the rule will not adversely affect reliability. As noted in 

section I.A of the final rule preamble, the interim compliance period has been adjusted to begin 

in 2022, we have provided states with flexibility with respect to the glide path, and “early” 

emissions reductions achieved between 2012 and 2022 can be accounted for in demonstrating 

compliance.

1.10.5 The EPA's discretion in applying the criteria for the best system of emission 

reduction

Comment 1: Case law shows that BSER should be technology forcing 
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Commenters listed case law interpreting language in the context of section 111(b), and noted that 

Courts have listed a number of factors EPA must consider in setting BSER and standards of 

performance. Commenters argued that first, EPA must ensure that it has chosen emissions 

limitation constitutes the "best" system in terms of the amount of emission reductions 

accomplished in light of other statutory considerations. "We can think of no sensible 

interpretation of the statutory word[] 'best' which would not incorporate the amount of air 

pollution as a relevant factor to be weighed when determining the optimal standard." Sierra Club 

v. Costle, 657 F.2d at 326. Commenters argued that the primary goal of the NSPS program is not 

merely to maintain air quality, but also to improve it. ASARCO v. EPA, 578 F.2d 319, 327 (D.C. 

Cir. 1978), and that, according to the D.C. Circuit, the "essential purposes" of the Clean Air Act 

include "reducing emissions as much as practicable." Sierra Club v. Costle, 657 F.2d at 326; see 

also Essex Chemical Corp. 486 F.2d at 437. Thus, concluded the commenters, whether the 

Proposed Rule actually does reduce carbon pollution from existing power plants as much as 

practicable is a central line of inquiry.

Commenters argued that, second, BSER under section 111(b) and (d) must be technologyforcing. Commenters noted that the D.C. Circuit pointed out a significant distinction between 

"system" and "standard," stating that "[i]t is the system which must be adequately demonstrated 

and the standard which must be achievable." Commenters stated the court clarified that an 

achievable standard need not be "routinely achieved within the industry," but must be "within the 

realm of the adequately demonstrated system's efficiency." Essex Chemical Corp., 486 F.2d at 

433-4 (D.C. Cir. 1973). 

Commenters argued that according to this reasoning, in Portland Cement v. Ruckelshaus, the 

D.C. Circuit dismissed cement industry groups' claims that section 111 emissions limitations 

cannot be "adequately demonstrated" unless cement plants already in existence are capable of 

meeting them. Commenters said that under Portland Cement and Essex, EPA may select as a 

system "a projection based on existing technology," restrained only by "the time in which the 

[projected] technology will have to be available," and then set a standard that is achievable, or 

technically feasible, for that system which, again, does not mean that any plant now in existence 

must be able to meet it. See Essex Chemical Corp., 486 F.2d at 434. Commenters argued that 

BSER, in short, must be based on the agency's projections for future equipment, rather than an 

analysis of whether the system is presently in widespread use, and also cited Sierra Club v. 

Costle, 657 F.2d at 326.

Commenters argued that EPA has not followed this precedent because, instead of selecting as 

BSER a system of emission controls based on what may fairly be projected for the regulated 

future and then setting a standard achievable by that projected system, EPA has built a 

requirement of present "technical feasibility" into the selection of the system itself, and then set a 

standard based on the average capability of that system.

Response 1: We discuss our interpretation of section 111(a)(1) and BSER in the preamble. Our 

interpretation that the system of emission reduction must be technically feasible is consistent 

with the case law and the fact that the emission performance level in the emission guidelines, 
191

which is based on the BSER, must be achievable by the affected sources. We recognize that 

under the D.C. Circuit case law, the BSER must be technology forcing but this does not mean 

that the BSER is not also required to be technically feasible. We explain in the preamble the 

different ways that Congress and the case law have indicated that technology can be advanced.

Comment 2: BSER May Be Technology-Forcing

Commenters argued that a BSER determination that is technology forcing would be valid for 

existing sources. 

Commenters said that the D.C. Circuit has held that a "best system of emission reduction" that is 

"adequately demonstrated" is "one which has been shown to be reasonably reliable, reasonably 

efficient, and which can reasonably be expected to serve the interests of pollution control without 

becoming exorbitantly costly in an economic or environmental way." Essex Chem. Corp. v. 

Ruckelshaus, 486 F.2d 427, 433 (D.C. Cir. 1973). The performance standard must be "achievable 

because it has been achieved." Natural Res. Def. Council v. EPA, 655 F.2d 318, 330 (D.C. Cir. 

1981) (citing cases). Commenters noted BSER "[w]hile not at the level that is purely theoretical 

or experimental, [the standard] need not necessarily be routinely achieved within the industry 

prior to its adoption." Essex Chem. Corp., 486 F.2d at 433-34 (D.C. Cir 1973). 

Commenters further noted that EPA "may base its determination that a technology is adequately 

demonstrated or that a standard is achievable on "the reasonable extrapolation of a technology's 

performance in other industries." Lignite Energy Council v. EPA, 198 F.3d 930, 934 (D.C. Cir. 

1999).

Commenters noted, "'Adequately demonstrated' does not mean that existing [sources] must be 

capable of meeting the standard; to the contrary, '(s)ection 111 looks toward what may fairly be 

projected for the regulated future, rather than the state of the art at present.'" Nat'l Asphalt 

Pavement Ass'n v. Train, 539 F.2d 775, 787.

Commenters said EPA correctly notes that a shared objective of both new and existing source 

standards under section 111 is that they must promote innovation and otherwise be "technology 

forcing" in their particular spheres. (See Lignite Energy Council citing Portland Cement at, 39; 

Nat'l Lime Ass'n. v. EPA, 627 F.2d 416, 433 n. 46 (D.C. Cir 1980) ("An achievable standard need 

not be one already routinely achieved in the industry."). Commenters noted that section 111 was 

designed "to assure the use of available technology and to stimulate the development of new 

technology." S.Rep.No. 95-127, at 171. Commenters said EPA, therefore, maintains the authority 

"to induce, to stimulate and augment the innovative character of industry in reaching for more 

effective, less costly systems to control air pollution." Commenters said that concept reasonably 

has a different meaning in the context of new sources regulated under section 111(b) than when 

applied to existing sources, but it is nevertheless also relevant to the determination of the BSER 

underlying section 111(d) existing source performance standards. 
192

Commenters also emphasized that past court cases have upheld standards that mandated higher 

than demonstrated efficiency based on EPA's prediction that the technology would be available 

in the future. Sierra Club v. Costle at 298, 330, 364. Commenters indicated that EPA has 

discretion, in setting standards under section 111(a), "to encourage innovative technology." Id. at 

347. Consistent with the technology-forcing purpose of the rule, commenters argued that the 

standard set by EPA should reflect efficiency improvements which may be anticipated to occur 

within the implementation period for the rule.

Response 2: We agree with the commenters’ reading of the case law. With respect to efficiency 

improvements, we appreciate the commenter’s suggestion that the building block 1 component 

of the BSER should reflect technology-forcing; EPA’s discussion of that issue is in section 

V.A.4.a of the final rule preamble of the CPP.

Comment 3: Commenters asserted that Congress allows BSER to encourage technology 

innovation. 

Commenters stated, Congress designed section 111(d) to be a provision of the Act that drives 

innovation and emission reductions." Commenters said, the definition of "standard of 

performance" establishing the "best system of emissions reduction" standard applies equally to 

section 111(b) and (d). Commenters said, Sierra Club v. Costle validates EPA's adoption of 

approaches that encourage continuing technology innovation:

Commenters stated, their interpretation of section 111(a) is that the mandated balancing of cost, 

energy, and non-air quality health and environmental factors embraces consideration of 

technological innovation as part of that balance. Commenters said, the statutory factors which 

EPA must weigh are broadly defined and include within their ambit sub-factors such as 

technological innovation. 

Commenters stated, in proposing the new source performance standards for new fossil fuel-fired 

power plants, EPA recognized the extensive legislative history and case law supporting the 

proposition that the technology-based standards under section 111 were intended to be 

technology forcing, thus supporting the further growth and development of a range of practices 

that are already firmly established within the industry. Commenters said, EPA concluded that:

"The legislative history just quoted identifies three different ways that Congress designed section

111 to authorize standards of performance that promote technological improvement: (i) the 

development of technology that may be treated as the "best system of emission reduction ... 

adequately demonstrated;" under section 111(a)(1) 151; (ii) the expanded use of the best 

demonstrated technology; and (iii) the development of emerging technology." 

Commenters stated, however, EPA does not premise BSER in the proposed Clean Power Plan on 

technologies that have not yet come to fruition. Commenters said, rather, the proposed rule is 

premised on currently existing emission reduction approaches that states and companies are 
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already implementing and are projected to expand. Commenters said, thus, EPA's approach is 

entirely consistent with the Congressional focus on encouraging innovation.

Response 3: We appreciate these comments.

Comment 4: Technology forcing relevant only to new sources

Commenters stated, with regard to technological innovation, the Court concluded only that "[i]n 

short, we can find no statutory bar to EPA's consideration of how various NSPS options will 

affect the development of new technologies which have economic, energy, and environmental 

implications of their own." Commenters said, although EPA relies on Portland Cement 

Association v. Ruckelshaus, that case also had nothing to do with existing stationary sources (but 

with new and modified sources) or with section 111(d). As the court said: 

"We begin by rejecting the suggestion of the cement manufacturers that the Act's requirement 

that emission limitations be "adequately demonstrated" necessarily implies that any cement plant 

now in existence be able to meet the proposed standards. Section 111 looks toward what may 

fairly be projected for the regulated future, rather than the state of the art at present, since it is 

addressed to standards for new plants - old stationary source pollution being controlled through 

other regulatory authority." 

Commenters stated, the Court noted, again, that the fact that technology was not in "...in actual 

routine use somewhere..." did not control because "[t]he essential question was whether the 

technology would be available for installation in new plants." 

Response 4: We disagree that these cases are not informative in interpreting CAA section 

111(a)(1) for purposes of CAA section 111(d). The cases address interpretation of the phrase 

“best system of emission reduction,” which is relevant under both CAA section 111(b) and (d) as 

both sections use the same term defined at CAA section 111(a)(1).

Comment 5: Comments that EPA conflated the Clean Air Act legal requirements for new and 

existing sources such that EPA failed to consider the remaining useful life of existing sources in 

setting the state emission goals.

Commenters stated, EPA directs the reader to the new source rule, where it cites a statement 

from a Senate Committee Report to the 1970 CAA Amendments regarding "constant 

improvement in techniques for preventing and controlling emissions from stationary sources." 

Commenters said, however, that Senate report clearly evinces the understanding that this 

technology forcing was to have prospective application, and not result in shutting down, or even 

affecting, existing sources. 
194

Commenters stated, the portion of Senator Muskie's statements, which EPA cited in a footnote to 

the proposed rulemaking for new sources and incorporates by reference in the Legal 

Memorandum for the Proposed Rule, does not support EPA's claimed legislative intent that 

section 111(d) be technology forcing. Commenters said, that legislative history refers instead to 

five requirements and explains "... that industry can make compliance with them possible or 

impossible." Commenters said, these five requirements refer to: 1) the promulgation and 

enforcement of NAAQS; 2) the establishment of "national air quality goals . . . for the major 

pollutants"; 3) the requirement under 111 that "newly constructed sources of pollution must meet 

rigorous national standards of performance" so that "[w]hile we clean up existing pollution, we . 

. . also guard against new problems"; 4) authorization to prohibit extremely hazardous emissions; 

and 5) the grant of authority "to set emission standards for selected pollutants which cannot be 

controlled through the ambient air quality standards and which are not hazardous substances." 

Commenters said, this statement, to the extent it refers to technology forcing under 111, clearly 

contemplates only new sources, not existing sources. 

Commenters stated, the legislative history of the 1970 Amendments cited in the new source 

proposed rulemaking as showing that among the congressional purposes was "the expanded use 

of the best demonstrated technology," speaks to the widespread application of BSER to new 

sources, and presumes that existing sources are otherwise being addressed. 

Commenters stated, the provisions for new source performance standards are designed to insure 

that new stationary sources are designed, built, equipped, operated, and maintained so as to 

reduce emissions to a minimum. Commenters said, the performance standards should be met 

through application of the latest available emission control technology or through other means of 

preventing or controlling air pollution. Commenters said, the maximum use of available means 

of preventing and controlling air pollution is essential to the elimination of new pollution 

problems while cleaning up existing sources. 

Commenters stated, as explained a few lines down, "The overriding purpose of this section 

would be to prevent new air pollution problems, and toward that end, maximum feasible control 

of new sources at the time of their construction is seen by the committee as the most effective 

and, in the long run, the least expensive approach." 

Commenters stated, EPA claims that BSER need not be achievable by "all[] of the existing 

sources in the source category." Commenters said, first, if EPA fails to set an achievable BSER, 

States can set higher emission limits when determining standards of performance; the risk of 

EPA identifying an unachievable BSER is not placed on States or sources. Commenters said, 

second, in claiming that BSER need not be achievable, EPA appears to rely on the discussion 

under section VI, subsection H of the proposed rule for new sources, but the legislative history it 

offers deals with distinct issues regarding national uniformity of emissions standards, not their 

onerousness with regard to particular source categories. Commenters said, the legislative history 

cited in the proposed new source rule at 79 Federal Register 1467 and note 169 deals exclusively

with regulation of sources of extremely hazardous emissions under the original section 112. 

Commenters quoted, "Under section 112, the Administrator must set emission standards for 
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hazardous air pollutants . . ." which "standards must be set to provide an ample margin of safety 

to protect the public health. This could mean, effectively, that a plant would be required to close 

because of the absence of control techniques. It could include emission standards which allowed 

for no measurable emissions." 

Commenters stated, between the 1970 and the 1977 amendments to the CAA, EPA did not 

construe section 111(d) as involving technology forcing. Commenters said, instead, it has 

tailored its regulation of new and modified primary copper, zinc and lead smelters, for example, 

to avoid discouraging expansion of existing sources owing to the unavailability of control 

technology at a reasonable cost. Commenters said, although EPA's proposed new source rule 

relies on legislative history for the 1977 amendments on the technology forcing issue, as we have 

seen those legislative statements were contemplating only "new sources." Commenters said, 

references to technology forcing were there and elsewhere always conjoined with the trigger of 

new construction, or reconstruction or modification of existing sources under section 111(b). 

Commenters stated, the House Conference Report from August 4, 1977, entitled "Statement of 

Intent: Clarification of Select Provisions," does state that "this year's legislation retains and even 

strengthens the technology forcing and technology encouraging goals of the 1970 Act," but with 

regard to section 111 it emphasizes that the goal is technology forcing of new source standards: 

"standards which effectively required use of the best practical control technology for new coalfired power plants." Commenters said, that report incorporated the House's criticism of those 

standards as "operat[ing] as a disincentive to the improvement of technology of new sources, 

since untreated fuels could be burned instead of using such new, more effective technology." 

Commenters stated, EPA's reliance on Robert M. Sussman's article is a weak reed indeed. 

Commenters said, that article argues that section 111(d) standards of performance could be set at 

"emission limits [that] are [not] achievable by every source subject to an ESPS," contending that 

section 111(d) could authorize EPA to deem the standards achievable because "achievable at a 

reasonable cost by the more modern, better performing coal and gas units, not by all plants." 

Commenters said, this analysis does not work because it is the States that ultimately have the 

authority to determine whether the BSER identified for their sources is achievable, not EPA. 

Commenters said, and the only support cited for this proposition is a case decided under the 

Clean Water Act. Commenters said, moreover, the article also argued: "By authorizing States 

under section 111(d)(1) to consider the 'remaining useful life' of a source covered by a standard 

of performance, Congress must have expected that BSER would be infeasible at specific plants 

and that the appropriate relief is to grant a 'variance' in cases of hardship as opposed to lowering 

the overall standard of performance." Commenters said, but this does not help EPA at all. 

Commenters said, to give effect to the congressional intent that remaining useful life be 

reasonably taken into account, hard, inflexible state-by-state goals cannot be promulgated if they 

cannot be met while giving reasonable consideration to remaining useful life. Commenters said, 

if the rule were otherwise lawful, EPA would have to modify the Proposed Rule to provide that 

remaining useful life considerations are superior to a State's assigned goal where those remaining 

useful life considerations are reasonably found by a State to prevent achievement of the goal. 
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Response 5: We disagree with this comment. For the reasons discussed in section V.A. and V.B. 

of the preamble and in the Legal Memorandum, our interpretation of the BSER is reasonable in 

light of the statutory text, statutory context, statutory purpose, and legislative history. 

Comment 6: Commenters said that, EPA's consideration of "promotion of implementation and 

use of technology" entails its declaration that its chosen BSER requires use of technology and 

therefore it satisfies the BSER criteria for promoting technology. Commenters said that the 

extent of EPA's discussion of this pre-eminent criteria in the proposed rule includes arguments 

for supporting its proposed BSER as meeting this criteria is -- EPA requires it, so it is best.

Commenters said that, if EPA is to apply such an overly broad interpretation of this criteria, it 

must do so in a manner that does not rely on circular logic, but instead, allows one potential 

approach to be distinguished from another, based on how each differs with respect to the criteria. 

Commenters said EPA has not supported its proposed BSER as "best" because EPA is using the 

philosophy that it is because we say it is.

Commenters said that, EPA's statements are demonstratively false with regards to building 

blocks 2, 3, and 4. Commenters said deployment of advanced NGCC is ongoing and would occur 

absent this rule -- just at a pace that is sustainable from an economic and environmental 

perspective. Commenters said studies show that increased availability of natural gas is the 

driving force for NGCC deployment. Commenters said that, EPA concedes that its BSER will 

not alter the rate of deployment of renewable energy. Commenters said that, EPA also admits 

that greater demand-side energy efficiency is already a common policy goal among states. 

Commenters said that, EPA has not provided compelling support for how its proposed BSER 

drives technology improvements. 

Commenters said that, EPA's proposed BSER could not be more short-sighted in failing to 

promote technological innovation and effective control measures for the affected sources, and as 

such, it does not meet this basic requirement for a standard of performance. Commenters said 

that, from cradle to grave, natural gas has numerous points in the system that result in GHG 

emissions -- from drilling, to compressor stations, to gas line leaks, to storage tanks, to name 

only a few. Commenters said that, coal has two non-trivial points of GHG emissions the fugitive 

emissions from the mine and non-fugitive emissions from the EGU related to combustion; 

therefore, coal presents much greater opportunity to reduce GHG emissions through future 

technological innovation because of the ability to research within this limited focus. 

Commenters said that, EPA does not yet even understand the nature and magnitude of the GHG 

emissions from natural gas production. Commenters said that, the EPA's Office of Inspector 

General "underscored the need for EPA to gain a better understanding of emissions and risks" 

from natural gas production. Commenters said that, EPA cannot pretend that its "system" 

promotes technological innovation over the compliance horizon, when ordinarily one must first 

study the problem before solving it -- meaning EPA is a long way from developing solutions for 
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natural gas GHG emissions. Commenters said that, EPA is not promoting investigation into a 

solutions aimed at controlling emissions from two known and well-characterized emissions 

points, which could eventually lead to significantly lower GHG emissions from coal-fired EGUs. 

Commenters said that, EPA's proposed BSER would phase out use of coal all together in 

Arizona. Commenters said that this is hardly technologically innovative. 

Commenters said that, Congress made clear its expectations with regards to research and 

development, "Finally, it establishes firmly that research and development on control technology 

is to be focused on recycling of pollutants and confined and contained disposal of pollutants, and 

not on ways of putting pollutants into the ambient environment." Commenters said that, 

Congress clearly expressed concern that measures such as load switching could "stifle research 

and development efforts by utilities, and emissions control equipment vendors, to find methods 

for the clean burning or pretreatment of coal." Commenters said that, EPA cannot claim that it 

properly considered "promotion of implementation and development of technology" when it 

provided no consideration to the way in which its proposed BSER creates disincentives for 

further technology developments for the affected facility. 

Response 6: We disagree with this comment. For the reasons discussed in section V.A. and V.B. 

of the preamble and in the Legal Memorandum, our interpretation of the BSER is reasonable in 

light of the statutory text, statutory context, statutory purpose, and legislative history. Further, as 

discussed in the preamble, our rule is consistent with promoting technological innovation.

Commenters’ concerns over greenhouse gas emissions from the natural gas production industry 

are not relevant to establishing standards of performance for the affected sources and therefore 

do not require a response.

Comment 7: BSER cost levels. 

Commenters argued that the costs of the proposed BSER may be significant, but still 

"reasonable." The commenters noted language in Portland Cement Ass'n v. Train, 513 F.2d 506, 

508 (D.C. Cir. 1975) that costs must not be "greater than the industry could bear and survive." 

Commenters stated EPA's standards of performance will meet the cost test unless the costs of 

meeting them would be greater than the industry could bear and survive. Commenters said with 

respect to cost, "the system must be one which can reasonably be expected to serve the interests 

of pollution control without becoming exorbitantly costly in an economic or environmental 

way." Nat'l Asphalt Pavement Ass'n, 539 F.2d at 786 (quoting Portland Cement Ass'n, 486 F.2d 

at 433); see also Essex Chemical Corp., 486 F.2d at 433, and Lignite Energy Council v. EPA, 

198 F.3d 930, 934 (D.C. Cir. 1999). 

Commenters said costs of the standards are those to which the industry can "adjust" in a "healthy 

economic fashion to the end sought by the Act as represented by the standards prescribed." 

Portland Cement Ass'n v. Train, 513 F.2d 506, 508 (D.C. Cir. 1975). Commenters noted that 
198

most pollutants regulated under section 111(b) new source standards are either criteria or 

hazardous pollutants, and thus not subject to 111(d) regulation.

Commenters stated the statute permits EPA to measure costs on an industry-wide basis and that a 

performance standard which is particularly costly, or even unaffordable to specific facilities due 

to their design may nonetheless be reflect the "best system of emissions reduction," provided the 

cost is reasonable to the industry as a whole. Commenters stated that where EPA demonstrates 

that it has taken cost into consideration, precedent directs courts to defer to the Agency's 

analysis. See Essex Chemical Corp., 486 F.2d at 437 (noting that "[i]t is not unlikely that 

industry and the EPA will disagree on the economic costs of these various control techniques," 

but having found that the Administrator considered economic costs as required by section 111 of 

the CAA, the court had "no desire or special ability to settle such a dispute"); Nat'l Asphalt 

Pavement Ass'n v. Train, 539 F.2d at 787 (same).

Response 7: We agree with this comment although we note that in this rule, the wide range of 

methods available to sources to implement the BSER and to achieve their emission standards 

means that few if any specific facilities can be expected to find the costs of compliance with 

emission standards that reflect the emission performance rates in the guidelines to be particularly 

costly or unaffordable.

Comment 8: EPA has erroneously substituted the weaker test of "reasonableness" in assessing 

BSER costs 

Commenters argued that in promoting innovative technology, EPA must also consider cost. 

However, commenters stated, existing case law does not, as the Proposed Rule and 

accompanying legal memorandum claim, instruct EPA to set costs at an open-ended and 

generally undefined level of "reasonableness." Instead, commenters argued that weight of the 

decisions defines acceptable cost levels as those short of "exorbitant," "exorbitantly costly," or 

"more than the industry could bear and survive." Commenters argued that EPA's substitution of 

"reasonableness" for these criteria means EPA is choosing to rely on a vague, standard-less term 

that does not reflect the case law. 

Response 8: We agree with the commenters’ reading of the case law. We agree that the caselaw 

clearly identifies the criteria for the cost component of the BSER and that the EPA has no 

authority to revise those criteria. We disagree that our use of the term “reasonableness” is an 

effort to revise those caselaw criteria. We use that term solely as a convenient reference for the 

cost criteria, and we define it as having the same meaning as the terms found in the caselaw, 

quoted by the commenters, to describe the cost criteria. 

Comment 9: EPA must take into account the emission reduction potential of permissible 

compliance methods when establishing standards of performance in emission guidelines. 
199

Commenters stated, the statute requires consistency between the emission reduction methods 

considered in establishing a standard of performance and the emission reduction methods 

available for demonstrating compliance with that standard. Commenters said, this has been 

called the "symmetry principle." Commenters said, where the emission guideline allows 

compliance with a performance standard through a broad range of emission reduction methods, 

EPA must consider the emission reduction potential of those compliance methods when 

determining the level of reductions that the standard requires.

Commenters stated, the symmetry requirement works in both directions. Commenters said, 

standards must reflect the degree of reduction achievable through the best system of emission 

reduction, considering costs. Commenters said, it would violate that requirement for EPA to set a 

performance standard based on a given emission reduction method, but then not allow that 

method to be used for compliance purposes; such a standard would be more stringent than the 

statute permits. Commenters said, likewise, it would violate the statute to allow the use of an 

identified emission reduction method for compliance purposes, but then ignore the reduction 

potential of that method when setting the target; such a standard would be less stringent than the 

statute requires. Commenters said, neither standard would represent the degree of emission 

reduction achievable at reasonable cost through the best system of emission reduction. 

Commenters said, the first would over-represent what is achievable considering costs; the second 

would under-represent it. 

Commenters stated, thus, EPA's determination of the performance standard or target must be 

informed by the compliance methods EPA allows under the rule. Commenters said, once EPA 

has identified the system of emission reduction that will be available for compliance purposes, it 

must set an emission standard that reflects the degree of emission limitation achievable, taking 

into account cost, by that system.

Commenters stated, the inclusion of credits derived from Building Blocks 2-4 substantially 

simplifies the question of assessing technical feasibility, because it changes the inquiry from 

what emission reductions are available to each source acting on its own, to what emission 

reductions are available to each source through the combination of measures acting alone and 

measures implemented through credit mechanisms across the electric system. Commenters said, 

the same is true regarding the consideration of costs. Commenters said, case law reviewed below

establishes that EPA must show the costs of compliance are not exorbitant for existing power 

plants considered as a group. Commenters said, that judgment must be made in light of the 

compliance methods the standard permits. Commenters said, any given standard will be less 

expensive to meet if it allows compliance on a system-wide basis - that is, by measures both 

within and beyond the fenceline - than if it allows compliance only by on-site measures. 

Commenters said, thus, for any given cost, system-based standards can achieve greater emission 

reductions. 

Commenters stated, although EPA must "tak[e] into account the cost of achieving such 

reduction," nothing in section 111 requires the standards to preserve the unregulated economic 

position of individual facilities. Commenters said, indeed, the D.C. Circuit has specifically 
200

rejected such a requirement, concluding that EPA may consider costs and energy impacts "in the 

broadest sense at the national and regional levels and over time as opposed to simply at the plant 

level in the immediate present." Sierra Club v. Costle, 657 F.2d 298, 330 (D.C. Cir. 1981). 

Commenters said, EPA may not impose regulatory costs that are "exorbitant" or "greater than the 

industry could bear and survive" when considered "at the national and regional levels and over 

time." Essex Chemical Corp. v. EPA, 486 F.2d 427, 433 (D.C. Cir. 1973); Lignite Energy 

Council v. EPA, 198 F.3d 930, 933 (D.C. Cir. 1999). Commenters said, within that constraint, 

EPA is permitted to establish performance standards that are expected to result in the reduced 

utilization or retirement of affected sources.

Commenters stated, the history and purpose of the section 111 and the Clean Air Act as a whole 

support EPA's authority to establish a cost-justified emission standard even if it is expected to 

result in reduced operation or retirement of affected sources. Commenters said, Congress 

intended section 111 to incentivize the "constant improvement in techniques for preventing and 

controlling emissions," S. Rep. 91-1196 at 16 (1970), and further recognized that one of the most 

powerful ways to incentivize these improvements to ask industry "to do what seems to be 

impossible at the present time." 116 Cong. Rec. 32,901-02 (1970) (remarks of Sen. Muskie). 

Commenters said, Congress knew that in some cases, what seemed impossible would in fact be 

impossible, and that some industrial sources of pollution would have to be "closed down." S. 

Rep. No. 91-1196, at 2-3 (1970); cf. Union Elec. Co. v. EPA, 427 U.S. 246, 270 n.1 (1976) 

(Powell, J., concurring) ("The record is clear beyond question that at least the sponsors and floor 

leaders of the Clean Air Act intended that industries unable to comply with approved state 

implementation plans ... would be "closed down'"). Commenters said, but in other cases, the 

Act's "[t]echnology forcing hopes [would] prove realistic," Whitman v. Am. Trucking Assn., 531 

U.S. 490, 490-92 (2001) (Breyer, J., concurring in part and concurring in the judgment), and 

sources would be able to comply with applicable emission standards without curtailing their 

operations. Commenters said, hence, the history and purpose of the Clean Air Act support EPA's 

authority to establish a cost-justified emission standard that is expected to cause some affected 

EGUs to reduce generation or retire. 

Commenters stated, the D.C. Circuit has also held, in Portland Cement v. Ruckelshaus, 486 F.2d 

375, 387 (D.C. Cir. 1973), that EPA is not required to perform a cost-benefit analysis under 

section 111 but must consider the results of such analyses when available. Commenters said, in 

this case, EPA has performed such analyses itself, and these analyses show that the quantifiable 

climate protection and public health benefits of meeting the proposed carbon pollution reduction 

targets vastly exceed the costs of implementation. Commenters said, that while no cost-benefit 

analysis is required, when such an analysis shows that benefits vastly exceed costs, EPA may -

indeed, must - conclude that costs are reasonable and non-exorbitant.

Commenters stated, NRDC's comments demonstrate that EPA's June proposal overestimated 

costs in a number of crucial respects, making the preponderance of benefits over costs even more 

striking. Commenters said, further, NRDC has analyzed the impact of the range of corrections 

and improvements recommended in these comments, using the same IPM modelling platform 

that EPA used for the proposal. Commenters said, these IPM analyses show that the net effect of 
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improving and strengthening the targets as NRDC recommends is a benefit-cost proposition even 

more favorable than EPA presented at proposal (see Section 8 of their comments). Commenters 

said, thus these recommended changes are justified under all reasonable methods by which EPA 

may "tak[e] into account costs."

Response 9: We disagree with this comment. For the reasons discussed in section V.A. and V.B. 

of the final rule preamble of the CPP and in the Legal Memorandum, our interpretation of the 

BSER is reasonable in light of the statutory text, statutory context, statutory purpose, and 

legislative history. 

Comment 10: EPA's use of different approaches to determine the four building blocks is 

arbitrary and unsupportable. 

Commenters stated, for each building block, EPA applies inconsistent approaches to determine 

state interim and final goals: building block 1 applies a national-level heat rate improvement to 

each coal-fired plant, regardless of the ability of an individual plant to realize these gains: 

building block 2 similarly applies a nationally-derived capacity goal for combined cycle plants; 

in contrast, for Building Block 3, state renewable goals take a regional approach, being driven by 

average renewable portfolio standard goals found in states arbitrarily grouped together by EPA; 

finally, for Building Block 4, energy efficiency goals are set using yet another method, as they 

are based on the incremental savings rate targeted by a handful of leading states.

Commenters stated, the use of differing approaches presents several problems. Commenters said, 

first, it is arbitrary and inconsistent. Commenters said, EPA makes no compelling argument why 

it is appropriate to use different approaches for different building blocks. Commenters said, 

second, it ignores a critical aspect of setting BSER: namely, what is achievable in practice for the 

specific type of units being controlled. Commenters said, this is inconsistent with EPA's 

historical approach to implementing section 111(d), which is to evaluate what has been 

demonstrated to be achievable by a unit type.

Commenters believed EPA should use a state-specific, bottom-up approach that relies on statespecific data when determining BSER under this rule. However, according to the commenters, if 

the EPA maintains its proposed approach, the methods used to determine and apply the building 

block goals must be adjusted so that they are consistent, logical, and congruent with historical 

applications of 111(d).

Response 10: In response to public comments, we have changes the method by which the state 

emission reduction goals are computed. For the reasons discussed in section V.A. and V.B. of the 

final rule preamble of the CPP and in the Legal Memorandum, our interpretation of the BSER is 

reasonable in light of the statutory text, statutory context, statutory purpose, and legislative 

history. 
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1.10.6 State-wide Application of the BSER; Appropriateness of Standards of Performance

Comment 1: Commenters stated that the EPA does not have the authority to establish BSER on 

a state-wide basis; CAA Section 111(d) requires for the establishment of BSER on a unit by unit 

basis. 

Commenters argued that the EPA does not have authority under the CAA or any other statute to 

impose a statewide CO2 emission reduction requirement. Commenters said, that under Section 

111(d) of the CAA, the EPA may require states to establish "standards of performance" for "any 

existing source" within their borders and noted the statute defines a "standard of performance" to 

mean: "A standard for emissions of air pollutants which reflects the degree of emission limitation 

achievable through the application of the best system of emission reduction..." Commenters also 

said that the EPA has always interpreted the "best system of emissions reduction" as something 

that occurs at the source (e.g. the existing coal-fired power plant) and argued that the proposed 

rule takes a novel position that because coal-fired power plants are themselves elements of the 

broader system (i.e., the U.S. electricity sector) BSER should be applied to this broader system. 

Commenters stated, EPA's proposed guidelines essentially establish a standard of performance 

for the source category that is not achievable by the source itself because it is premised on a 

series of activities by others in the interconnected system of electricity generation, and 

transmission. Commenters said, the question arises as to whether EPA's proposed standard for 

each state is a legal approach to setting a standard of performance for an existing affected 

facility.

Commenters stated, the entire structure for setting standards under Section 111 (b) or 

establishing guidelines under Section 111 (d) is based on setting standards of performance for 

stationary sources. Commenters said, EPA must first define the source categories for which it 

intends to set standards. Commenters said, before establishing guidelines for existing sources, 

EPA must first identify specific sources for which it establishes standards for new stationary 

sources and for pollutants that are not criteria pollutants or regulated under Section 112 

(assuming for the moment EPA is entitled to regulate the source category at all if it is regulated 

under Section 112).

Commenters stated, section 111(a)(3) defines a "stationary source" as "any building, structure, 

facility, or installation which emits or may emit any air pollutant." Commenters noted that EPA 

has promulgated, literally, hundreds of standards of performance for new and modified sources 

in a defined source category under Section 111(b) of the CAA. Commenters said, in less than a 

dozen instances it has issued emissions guidelines under Section 111(d) for a defined category of 

sources. Commenters said, the definition of source is the same for purposes of setting 111(b) and 

111(d) standards.
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Commenters stated, EPA does not specifically include a definition of affected source category 

because it has issued the proposed Section 111(d) guidelines prior to finalizing its NSPS under 

Section 111(b) for this source category. Commenters said EPA does reference its January 8, 

2014 proposed NSPS. See, 79 Fed. Reg. at 34852. Commenters stated that the EPA deto define 

the affected source category as

"any fossil fuel fired combustion unit that supplies more than one-third of its potential annual 

electric output and more than 25 MW net-electrical output (MWe) to any utility power 

distribution system for sale, with certain exceptions noted below. For this proposed rule, covered 

EGUs include electric utility steam generating units ("boilers"), stationary combined cycle 

combustion turbines and their associated HRSG) and duct burners; and IGCC units, including 

their combustion turbines and associated HRSG. However, for purposes of this rule, covered 

EGUs do not include stationary simple cycle combustion turbines or EGUs located in Hawaii or 

other noncontinental areas. In addition, units subject to emission requirements under CAA 

section 129 would not be subject to requirements under this proposed rule." 

Commenters stated, as noted, Section 111(a)(i) of the CAA defines a "standard of performance" 

as:

... a standard for emissions of air pollutants which reflects the degree of emission 

limitation achievable through the application of the best system of emission reduction 

which (taking into account the cost of achieving such reduction and any non-air quality 

health and environmental impact and energy requirements) the Administrator determines 

has been adequately demonstrated. 

Commenters stated, section 302 of the CAA also defines standard of performance as "a 

requirement of continuous emission reduction, including any requirement relating to the 

operation or maintenance of a source to assure continuous emission reduction." 

Commenters stated, under Section 111(b), the fundamental starting point for setting a new source 

standard of performance is that it is for a source in the defined source category. Commenters 

said, regardless of one's view on the substantive merits of the NSPS proposal and whether the 

proposed standard reflects BSER, one need only look at the Section 111(b) proposal for the same 

source category to see the inconsistent approach to defining BSER. Commenters said, in that 

proposal EPA does not look at any of the other components of the building blocks used here to 

define BSER for new sources. Commenters said, rather it looks at a suite of measures achievable 

at the source to determine BSER for new sources in the same source category. Commenters said, 

EPA defined BSER for new units based on what the source itself could do to reduce emissions in 

a manner consistent with previous NSPS standards. Commenters said, in contrast, EPA in this 

proposal has set a statewide standard for the source category that defines BSER to include 

measures well beyond the control of the source in stark contrast to every previously issued NSPS 

or guideline. Commenters said, rather than look at BSER for the source category, EPA defines a 

state's BSER based on requiring a state to regulate the entire electricity system in the state from 

generation to use, including requirements to develop alternative types of energy generation 
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sources and reducing demand for the product coming from the source category. Commenters 

said, if one sets aside the very emotional discussion over control of GHGs from power plants, it 

becomes more readily apparent that EPA's approach is legally vulnerable. Commenters said, for 

example, if EPA were proposing emissions standards for pulp and paper mills, would EPA's 

action be considered legitimate if, in establishing the standard for a paper mill and setting BSER 

it suggested that the overall standard could be more stringent based on the fact that states could 

require that offices move to a "paperless office" and/or print less paper? Commenters said, could 

EPA set an emissions standard for an automobile assembly plant painting operation and make it 

more stringent by determining that cars could be smaller and thus need less paint or that 

increases in mass transit in a state could reduce the need to paint as many cars at the plant?

Commenters said, under Section 111, however, Congress has only authorized establishment of 

standards of performance (or guidelines under 111(d)) for stationary sources that reflect the 

application of BSER for the source, not some general target of emissions reduction from all 

sources that may in some way help reduce GHG emissions. Commenters said, EPA is not 

establishing an ambient standard under Section 111(d), nor can it.

Commenters stated, EPA itself several times in the preamble noted that a state plan "must 

include enforceable CO2 emission limits that apply to affected EGUs." Commenters said, but it 

then leaps to say that because BSER includes measures beyond the source, the impact of those 

measures can be enforceable against the source in its emission limit. Commenters said, it reaches 

this conclusion by effectively disregarding any linkage between the source and the standard -

which is at odds with the very structure of Section 111. Commenters said, a much more logical, 

and legally supportable, reading of Section 111 links the standard of performance to the source.

Commenters stated, subsections of Section 111 express clear congressional intent to require the 

promulgation of standards applicable to individual sources. Commenters said, when managing 

emissions from existing units, Section 111 anticipates the States will be "applying a standard of 

performance to any particular source." Commenters said, in so prescribing, the statute outlines 

two expectations: (1) States will look with particularity at specific units applying standards of 

performance, and (2) EPA's guidelines must allow States to make prudential assessments about 

the remaining useful life of particular existing units and other source-specific factors in 

determining the extent to which to apply those standards to each unit. Commenters said, the 

principle focus of the standard-setting process must thus be whether the unit itself can meet the 

prescribed standards.

Commenters stated that States are not an "existing stationary source." Commenters stated that 

Section 111(d) states that EPA must establish standards of performance that will be applicable to 

existing stationary sources. Commenters stated that in setting single state-wide CO2 emissions 

limits, the EPA in effect is attempting to define the entire state as a single existing stationary 

source and then setting the standard for such source. Commenters stated that this not only 

directly conflicts with Section 111(d)'s deference to the states to establish standards within their 

own border, it also is an arbitrary and capricious application of the CAA that conflicts with the 
205

plain language of the Act, which defines a stationary source as "any building, structure, facility, 

or installation which emits or may emit any air pollutant.'

Commenters stated that EPA claims that "emissions reduction measures that the states 

themselves have the authority under state law to put in place may be considered part of BSER." 

Commenters stated that EPA's interpretation is inconsistent with the terms of section 111. 

Commenters said EPA has used renewable energy portfolio standards (RES or RPS) policies and 

state-mandated utility efficiency programs as a basis for determining state goals. Commenters 

noted, reading the plain language of CAA section 111(d)(1)(A) that authorizes state plans to 

establish standards of performance for any existing source, the determination of the best system 

of emission reduction (BSER) must be source-based and not system-based or state-based. 

Commenters said standards of performance should be based on reductions in CO2 emissions that 

can be reasonably achieved through actions at individual electric generating units (EGUs). 

Commenters stated, that is, the standards of performance that states establish must be a "standard 

for emissions of air pollutants" for those affected sources and not for the state itself. In CAA 

Section 111(i)(1), the commenters stated that the term "standard of performance" means a 

standard for emissions of air pollutants which reflects the degree of emission limitation 

achievable through the application of the best system of emission reduction which (taking into 

account the cost of achieving such reduction and any nonair quality health and environmental 

impact and energy requirements) the' Administrator determines has been adequately 

demonstrated. Commenters noted that the Kansas legislature reinforced this interpretation with 

the passage of House Bill 2636, effective July 1, 2014. 

Commenters stated the EPA is not authorized to adopt those portions of the goal that are derived 

from Building Blocks 2, 3, and 4, since they do not relate to standards for the regulated 

stationary source. Commenters stated that the EPA standards for stationary sources under 

Section 111 should begin and end with the regulated source itself. Commenters stated that a new 

source performance standard (''NSPS") or existing source guideline must apply to individual 

sources; must be based on reductions that an individual source can achieve; and must be based 

on the use of a system that is incorporated into the design of the source. 

Commenters requested that the U.S EPA withdraw the proposed guidelines and issue new 

guidelines that allow the southern states to establish policies that are in the best interest of the 

region and each of its states. Commenters said, the guidelines should be based on EPA 

guidelines for cost-effective, achievable reductions at the affected power plant units, rather than 

the states.

Commenters stated, the Clean Air Act Section 111(d) requires for the establishment of BSER on 

a unit by unit basis. Commenters said, the CPP has without clear congressional authorization 

expanded and thus exceeded its authority and the intent of section 111(d) by establishing BSER 

using criteria not related to the affected units.
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Commenters stated, standards of performance cannot be established on a state-by-state basis. 

Commenters said, section 111(d) provides for EPA to adopt regulations calling on states to 

submit plans establishing "standards of performance for any existing source." Commenters said, 

thus, standards of performance must be established on a source-by-source basis, not a state-bystate basis.

Commenters thought the EPA has not provided an adequate explanation for straying from the 

prior constraints of establishing BSER for a specific type of "source" as required by Motor 

Vehicle Mfrs. Ass'n v. State Farm Mut. Auto, Ins. Co., 463 U.S. 29, 43 (1983), which held that 

in deciding whether an agency action is arbitrary and capricious, this Court considers whether 

"the agency [examined] the relevant data and articulate[d] a satisfactory explanation for its action 

including a 'rational' connection between the facts found and the choice made.")

Commenters said, a "designated facility" is an existing stationary source that is the same type of 

source for which EPA has proposed or promulgated a New Source Performance Standard and 

emits the pollutant that is the subject of the emission guidelines. 

Commenters stated the "designated facilities" are the "affected EGUs." Commenters said, yet, 

EPA's emission guidelines do not reflect the best system of emission reduction that has been 

adequately demonstrated for those affected EGUs, as required by Subpart B. Commenters said, 

instead, it reflects the degree of emission reduction that EPA believes is achievable through the 

application of the best system of emission reduction that EPA has determined has been 

adequately demonstrated for states. Commenters said, EPA's Legal Memorandum makes this 

quite clear: "In this rulemaking, the EPA proposes to determine the 'best system of emission 

reduction ... adequately demonstrated' on a state-by-state basis." 

Commenters stated, thus, EPA's proposed CPP overlooks the fundamental regulatory 

requirement that its guideline documents must provide information on systems of emission 

reduction that can be applied to affected EGUs, and emission guidelines that are based on the 

best system of emission reduction that has been adequately demonstrated for affected EGUs. 

Commenters said, instead, EPA's proposed guideline document discusses and selects what it 

believes to be the best system of emission reduction that has been adequately demonstrated for 

the states in which those affected EGUs are found, which is contrary to 40 C.F.R. Part 60, 

Subpart B, and therefore unlawful. 

Commenters stated that, first, the standards of performance to be established by States under 

Section 111(d) are intended to be source-based standards. Commenters said the plain text of 

Section 111(d) directs States to "establish[] standards of performance for any existing source ... 

to which a standard of performance would apply if such existing source were a new source." 

Commenters said further, the standard of performance must reflect the "best system of emission 

reduction" adequately demonstrated, and, as described in Section VII.A.1., infra, a "system of 

emission reduction" under Section 111 is inherently source-specific. Commenters said EPA 

recognized this in its initial 1975 rulemaking to implement Section 111(d), in which the EPA 

asserted that Congress intended the emission guidelines and standards of performance 
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established under Section 111(d) to be technology-based. Commenters said a technology-based 

standard is inherently source-specific, and EPA tacitly acknowledged this while discussing 

States' authority to impose more stringent standards: "EPA's emission guidelines will reflect its 

judgment of the degree of control that can be attained by various classes of existing sources 

without unreasonable costs. Particular sources within a class may be able to achieve greater 

control without unreasonable costs." Commenters said the question of whether or not a source or 

category of sources can achieve the level of control in an emission guideline only makes sense in 

the context of a source-specific approach. Commenters stated that, second, the "best system of 

emission reduction ... adequately demonstrated" for an existing source or category of sources 

cannot be contingent on the existence (or capacity to construct) other, unrelated facilities that 

produce the same product. Commenters said that is exactly what EPA has done here with respect 

to electricity generation. Commenters said under EPA's proposed BSER analysis, the agency 

looks beyond the emissions controls that can be implemented by coal-fired EGUs and also 

considers the availability (or future availability) of other sources of electricity generation that

could displace electricity generation from existing coal-fired EGUs. Commenters said there is no 

statutory basis for such a State-wide approach. Commenters said neither the "integrated nature of 

the electricity system," nor the fact that States are directed to submit Statewide implementation 

plans creates a basis for EPA to deviate from Congress' intent that systems of emission reduction 

be evaluated on a source-specific basis under Section 111(d). Commenters said to the extent that 

there is any flexibility to look beyond individual facilities under Section 111(d), that flexibility 

belongs to the States as they develop implementation plans, not to EPA as it develops emissions 

guidelines. Commenters said a central premise of any fair and reasonable regulatory scheme is 

that like sources should be treated alike. Commenters said this is particularly true in the case of 

GHG emissions, where the pollutant at issue is truly global in nature and there are no localized 

impacts that could justify treating similar sources differently. Commenters said that after taking 

into account remaining useful life and other related factors, the standards of performance 

established under Section 111(d) should essentially apply uniformly to all existing fossil fuelfired EGUs. Commenters said EPA's proposed emission reduction targets fail to meet this 

standard. Commenters said for example, under EPA's analysis, two identical coal-fired EGUs 

operating in neighboring States built at the same time using the same technology would be 

subject to different emissions control obligations under Section 111(d) based solely on the 

availability of competing natural gas, nuclear, and renewable energy in the State. Commenters 

said for example, on an aggregate basis, coal-fired EGUs in Texas will be required to reduce 

their capacity by 50% in order to comply with the proposed emission reduction target as a result 

of the presence of underutilized NGCC facilities in the State. Commenters said in contrast, coalfired EGUs in West Virginia will not need to reduce generation at all because there is no existing 

NGCC capacity available to replace it. Commenters said it is both arbitrary and capricious and 

contrary to Congress' intent that virtually identical existing sources could be subject to such 

divergent emission control obligations.

Commenters stated, EPA's imposition of state-wide goals, rather than source-specific emission 

standards, is inconsistent with CAA section 111(d) and EPA's own implementing regulations. 
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Commenters said, by setting state-wide goals without reference to particular sources of 

emissions, the proposed guidelines stray from the source-focused structure of section 111. 

The text of section 111(d) clearly authorizes the regulation of sources, not states. Commenters 

stated, Section 111(d) requires states to "establish[ ] standards of performance for any existing 

[stationary] source." See CAA section 111(d)(1)(A). Commenters said, section 111 defines 

"stationary source" as "any building, structure, facility, or installation which emits or may emit 

any air pollutant." See CAA section 111(a)(3). Commenters said, section 111 contains numerous 

other references to sources, and section 111(d) also requires the EPA and the states to consider 

the "remaining useful lives" of regulated sources in promulgating standards.

Commenters stated, analyzing the section's structure, it is useful to view the initial portion of 

section 111(d)(1) with the applicable definitions fully interposed:

"Each State shall submit to the Administrator a plan which (A) establishes [a standard for 

emissions of air pollutants which reflects the degree of emission limitation achievable through 

the application of the best system of emission reduction which (taking into account the cost of 

achieving such reduction and any non-air quality health and environmental impact and energy 

requirements) the Administrator determines has been adequately demonstrated for any [building, 

structure, facility, or installation] [other than a new source] [which emits or may emit any air 

pollutant] for any air pollutant."

Commenters stated, the full text suggests that standards promulgated under 111(d) must consider 

both "the degree of emission limitation achievable" as well as "the best system of emission 

reduction" for any existing stationary source. Commenters stated, additionally, EPA advanced a 

source-oriented interpretation of the statute in its implementing regulations, which provide that 

the Agency will issue guidance on the best system of emission reduction adequately 

demonstrated "or designated facilities," and that EPA will consider "sizes, types, and classes of 

designated facilities," in setting guidelines for state plan development. See 40 C.F.R. section 

60.22(b).

Commenters stated, however, the proposed guidelines deviate from this source-based framework 

by basing standards entirely upon the state in which an affected EGU is located, rather than the 

attributes of any specific source. Commenters said, EPA states as much, noting that "he EPA sets 

out proposed state-specific CO2 emission performance goals," but that "the EPA's guidelines 

contain no emission standards that the state must apply directly to a specific EGU." See 79 Fed. 

Reg. at 34,892 and 34,925. Commenters said, this is a questionable approach in light of the 

structure of the statute, as well as EPA's prior interpretation of it in the implementing regulations. 

Commenters said that nothing in section 111(d) clearly authorizes EPA to set emission goals 

based upon a large, heterogeneous set of units aggregated across a state. Commenters said, 

instead, for EPA to regulate CO2 emissions (or emissions of any other type of pollutant) from 

existing sources, the regulations should be based on the sources themselves - and on a standard 

of performance attainable by implementing measures at those sources - rather than an 

aggregation of sources that happen to be within a particular state. . 
209

Commenters stated that section 111(d) instructs EPA to "prescribe regulations which shall 

establish a procedure similar to that provided by [Section 110]" under which states submit plans 

to EPA establishing standards of performance for existing sources for criteria air pollutants and 

providing for the implementation and enforcement of those standards. Commenters said, this 

cross-reference to section 110 does not form a statutory basis for the establishment of statebased, instead of source-based, emission limitations in the proposed guidelines.

Commenters stated, section 110 governs state plans for achieving the National Ambient Air 

Quality Standards (NAAQS). Commenters said, however, section 110 does not itself provide the 

basis for establishment of the NAAQS. Commenters said, rather, it is section 109 that provides 

that foundation of authority. Commenters said, in other words, section 110 outlines the 

procedures and authorities of the states in meeting an emission limitation that is established 

under the auspices of a separate section of the statute. Commenters said, section 110 prescribes 

the scope of state planning authorities in meeting the substantive limitation established by EPA 

under section 109.

Commenters stated, accordingly, when Congress included a cross-reference to the "procedure" of 

section 110, it intended to harness the state-based planning process of section 110; it did not 

intend also to establish the scope of EPA's substantive authority to set the emission limitation 

that a state plan must achieve. Commenters said, rather, the scope of the authority to set an 

emission limitation is provided by the rest of section 111, which, as discussed above, clearly 

contemplates the application of standards of performance for sources. Commenters said, in this 

way, section 111 is distinct from section 109, which contemplates ambient air quality standards, 

without regard to particular sources.

Commenters stated, for these reasons, it is not valid to read the section 111(d) cross-reference to 

section 110 as authority for EPA to impose state-based emission limitations.

Commenters believed the EPA did not sufficiently show that the proposed BSER meets the legal 

criteria on a state-specific basis. Commenters stated, EPA has not made any findings that the 

particular BSER mix used to set each state-specific emission limitation is achievable, 

demonstrated, cost-effective, and considers energy impacts specific to any of the states. 

Commenters said, for example, EPA has not conducted a state-by-state cost analysis of the 

Building Blocks for the proposed guidelines, nor has EPA conducted a state-by-state reliability 

analysis. Commenters said, EPA's analyses are mostly national and at best regional.

Commenters stated, EPA highlights the fact that BSER in the context of section 111(b) has been 

interpreted such that EPA need only find that the system is achievable for some sources; it need 

not find that it is achievable for every source. See Legal Memorandum at 39-40. Commenters 

said, EPA argues this approach should be applied to the BSER determination under section 

111(d) based on the Clean Air Act's discussion of a state's ability to take into account a source's 

remaining useful life. Commenters said, the proposed guidelines, however, draws the wrong 

analogy. Commenters said, even if EPA need not show that BSER is achievable for every source, 

EPA has not set source-specific standards in this rule. Commenters said, instead, it has 
210

determined BSER on a statewide basis. Commenters said, yet EPA has not demonstrated that the 

particular mix of BSER Building Blocks is achievable for every state. Commenters said, in fact, 

EPA has effectively conceded that the BSER Building Blocks may not be achievable by a 

particular state. See 79 Fed. Reg. at 34,893.

Commenters stated, this approach raises legal questions particularly because EPA has established 

a BSER methodology that sets state-specific emission rates. Commenters said, EPA is, in effect, 

claiming that while the rate was set based on the particular state's circumstances, it need not 

evaluate whether those circumstances actually are consistent with the mix of Building Blocks the 

EPA has determined are achievable. Commenters said, the proposed guidelines do not establish 

that the four Building Blocks can be implemented together as an achievable, adequately 

demonstrated, cost-effective "system" for each state.

Commenters said, EPA's proposal to set state goals has an additional flaw. Standards of 

performance cannot be established on a state-by-state basis; they must be established on a unitby-unit basis.

Commenters stated, section 111(d) states that EPA must establish standards of performance that 

will be applicable to existing stationary sources. Commenters said, in setting single state-wide 

CO2 emissions limits, the EPA in effect is attempting to define the entire state as a single 

existing stationary source and then set the standard for such source. Commenters said, this not 

only directly conflicts with Section 111(d)'s deference to the states to establish standards within 

their own border, it also is an arbitrary and capricious application of the CAA that conflicts with 

the plain language of the Act, which defines a stationary source as "any building, structure, 

facility, or installation which emits or may emit any air pollutant." Commenters said, if EPA is 

prevented from viewing multiple components of a plant as a single source, it is certainly 

prevented from viewing an entire state as a source. Commenters said, further, EPA is 

concurrently asking the state, which is tasked as the regulator and implementing body for Section 

111(d) rules, to regulate itself as the stationary source. Commenters said, again, this is an 

illogical and contradictory application of the CAA. 

Commenters stated, under section 111(d), EPA's obligation is to establish standards of 

performance for any existing source, and so by definition the "standard of performance" must be 

applicable to "the existing source." Commenters said, an existing source means any stationary 

source other than a new source. Commenters said, and so any proposed standard of performance 

necessarily identifies the "stationary source" to which it applies. Commenters said, the "standard 

of performance" that EPA proposes (e.g., 853 lbs CO2/MWh for Texas) is applicable to the 

State, and is based on what EPA has determined is achievable by application of BSER to the 

generation mix of that state. Commenters said, accordingly, in this first construct, the State must 

be the "stationary source." Commenters said, but this is impossible given that section 111 

distinguishes "states" from "stationary sources": The former is regulator, the latter the subject of 

regulation.
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Commenters stated, and this state-as-stationary-source construct grinds other statutory gears, as 

well. Commenters said, "the term 'stationary source' means any building, structure, facility, or 

installation which emits or may emit any air pollutant ...." Commenters said, it was in the 

selfsame Supreme Court case recognizing EPA's discretion to interpret an ambiguous statute that 

the Court upheld EPA's decision to adopt a plant-wide meaning to the section 302(j) definition of 

stationary source. Commenters said, that's a far cry from authorizing EPA to interpret "stationary 

source" to comprise an entire state. Commenters said, besides, the section 302(j) definition of 

"stationary source" construed in Chevron is broader than the one that governs here, as the 

Supreme Court then noted: "The definition of the term 'stationary source' in section 111(a)(3) 

refers to 'any building, structure, facility, or installation 'which emits air pollution .... This 

definition is applicable only to the NSPS program by the express terms of the statute; the text of 

the statute does not make this definition applicable to the permit program." 

Commenters stated, as the Supreme Court recently reminded EPA, nothing in the CAA 

authorizes the Agency to regulate GHGs "in any way that would be 'extreme,' 'counterintuitive,' 

or contrary to 'common sense.'" Commenters said, yet even a cursory examination of the 

Proposal reveals that it is rife with extreme, counterintuitive, and nonsensical consequences. 

Commenters said, beyond the legal and technical flaws described above, EPA's Proposal is 

simply not a rational, consistent, or efficient approach to regulating GHG emissions from 

existing EGUs. Commenters said, these counterintuitive results "should have alerted EPA that it 

had taken a wrong interpretive tum" in developing the Proposal. 

Commenters believed that the EPA arbitrarily grouped sources together by state. Commenters 

felt that this approach violate the CAA by shifting the focus of the Proposal from individual 

existing sources to combinations of them and also defies logic. Commenters said, grouping 

existing EGUs together by state bears no relation to the achievability, cost, or implementation of 

the measures that EPA has proposed to use as the basis for the Proposal, and it obscures the 

effect of these measures on individual EGUs. Commenters said, the fact that a group of coalfired EGUs are located in the same state does not indicate that they share any similar 

characteristics with regard to their potential to implement heat rate improvement measures, and 

EGUs in the same state do not necessarily operate under the direction of a common dispatch 

authority or share common natural gas pipelines or transmission infrastructure. Commenters also 

noted that state policies for promoting renewable energy resources do not necessarily focus on 

developing such resources within the state itself.

Commenters stated that EPA's imposition of individualized State-wide goals is inconsistent with 

the structure of Section 111(d). Commenters stated that Section 111 explicitly focuses on 

stationary sources. Commenters stated that Section 111 is titled "standards of performance for 

new stationary sources," and Section 111(d) is "standards of performance for existing sources." 

Commenters stated that the "stationary sources" that Section 111 considers are narrowly 

confined to "building[s], structure[s], facilit[ies], or installation[s]," and not combinations thereof 

or integrated markets. Commenters stated that Section 111(d) is limited to source-by-source 

focused regulation. Commenters stated that Section 111 performance standards may be imposed 

only on sources that actually emit or may emit air pollutants. Id. Section 7411(a)(6).
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Commenters argued that CAA Section 111 is a source-based regulatory program and CAA 

Section 111(d) authorizes the states (or EPA) to establish "standards of performance for any 

existing source." Commenters argued that setting different state-based emission requirements is 

incompatible with this source-based approach, and the requirement should apply uniformly to the 

entire source category, taking into account an existing source's remaining useful life.

Response 1: We disagree with this comment. In section V.A of the final rule preamble of the 

CPP, we discuss the reasons why we are authorized to set state-wide goals and include the 

building blocks as part of the BSER. In addition, our approach of applying uniform rates 

eliminates the problems of inconsistent requirements that commenters note. For the reasons 

discussed in section V.A. and V.B. of the preamble and in the Legal Memorandum, our 

interpretation of the BSER is reasonable and within the scope of EPA’s authority in light of the 

statutory text, statutory context, statutory purpose, and legislative history. With respect to the 

proper scope of analysis for building block 1, see section V.C of the final rule preamble of the 

CPP and Chapter 2 of the GHG Mitigation Measures TSD supporting the final CPP.

Comment 2: Commenters argued that the EPA has not provided a statutory basis for treating an 

entire state as a “source.”

Commenters said, the proposed rule does not sufficiently identity the statutory basis for EPA's 

treatment of an entire state as the "source," as opposed to individual facilities, as is contemplated 

by the definitions and structure of Section 111. See CAA section 111(a)(3) & (6), 42 

U.S.C. section 7411(a)(3) & (6); 40 C.F.R 60.20 - 60.29. 

Response 2: The EPA disagrees with the commenters for the reasons discussed in section V.A. 

of the final rule preamble of the CPP. 

Comment 3: The EPA cannot justify state-wide goals by claiming the EPA is exercising its 

subcategorization authority.

Commenters stated that the EPA tries to justify setting "goals" state-by-state as an exercise of its 

subcategorization authority, quoting its regulations that allow the Agency to "specify different 

emission guidelines or compliance times or both for different sizes, types, and classes of 

designated facilities, when costs of control, physical limitations, geographical location, or similar 

factors make subcategorization appropriate." Commenters argued the EPA undoubtedly has the 

authority to categorize and subcategorize under Section 111(b)(2) "for the purpose of 

establishing" performance standards, but the EPA must have a rational basis, grounded in the 

statute, to create categories and subcategories. Commenters said, if there are technological 

differences between types of facilities or differences in the types of fuel similar facilities use, 

then the EPA can create different categories and subcategories, as it has done many times in the 

past. Commenters said, in theory, geography could be the basis for subcategorizing to the extent 
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there is some reason why geography affects the level of performance of various types of control 

technology that could be used as the basis for setting performance standards for coal EGUs. 

However, commenters noted that the EPA cites no geographical distinctions in the proposal, and 

there obviously are none. Commenters said, the Agency's only "geographical" justification for 

setting state-by-state standards is that different states have different resource mixes and so should 

have different carbon-intensity goals. However, commenters argued the EPA does not have the 

authority to determine BSER for coal EGUs based on a state's utility system, and therefore 

differences in states' resource mixes is not a valid justification for subcategorizing on a state-bystate basis. Commenters said, differences in statewide resource mixes is certainly not what EPA 

had in mind in its subcategorization regulations when it referred to "costs of control, physical 

limitations, geographical location, or similar factors." 

Response 3: The EPA disagrees with the commenters for these reasons discussed in section V.A. 

of the final rule preamble of the CPP. 

Comment 4: Commenters opposed setting state-wide goals arguing that because the grid does 

not operate on a state-by-state basis state-wide goals are not appropriate.

Commenters stated that another example of the failure of EPA's state-by-state approach to reflect 

the interstate nature of the grid is EPA's inconsistent and confusing approach to the interstate 

dispatch of renewable and fossil resources. Commenters said that, recognizing that renewable 

power is often sold to out-of-state purchasers, EPA appears willing to at least consider that the 

state in which the purchaser of renewable power is located should get credit for the CO2 

emissions that the wind unit supposedly avoids, even if the power is produced in a different state, 

at least to the extent the sale is reflected in a renewable energy credit. Commenters said the same 

is not the case for fossil power, even though fossil power is at least as likely to be sold out-ofstate as renewable power and can easily be tracked either because the power is sold under firm 

contracts or through electronic tagging systems. Commenters said that this differential treatment 

is arbitrary and creates the illogical incentive to operate coal generation in states with relatively 

less stringent goals, and to curtail coal generation in states with relatively stringent goals, even 

though that incentive may not align with the economic and efficient operation of the grid and 

does not result in reduced CO2 emissions on a national level.

Commenters stated the biggest challenge in implementing the proposed rule is that electricity 

markets are interstate in nature. Commenters said the proposal's state-by-state approach results in 

an enforcement regime that would be awkward at best, and potentially very inefficient and 

expensive. Commenters said the interstate nature of these markets is illustrated by the example 

of Idaho. Commenters said while that state currently does not generate electricity from coal 

plants within its borders, it consumes coal-generated energy produced in at least five other states. 

Commenters said if those states decrease their coal generation and Idaho compensates by 

increasing generation from its existing natural gas plants, it creates complications related to its 

initial carbon baseline and its carbon baseline going forward.
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Commenters stated that EPA's state-by-state goals are also unreasonable in light of the way that 

the electric generation, transmission, and distribution system operates. Commenters said that in 

the continental U.S., the transmission grid enables electricity that is generated in one state to be 

consumed in another. Commenters said interstate power transactions are the norm in most states, 

rather than the exception. Commenters said that often, meeting demand in one state will require 

production of electricity (and emission of CO2) in another state. Commenters said that similarly, 

an affected EGU's ability to reduce its output is often tied directly to the decisions of consumers 

in neighboring states, to the decisions of other EGU operators, and to factors such as weather or 

economic demand - all of which are almost entirely outside of the control of the EGU operator 

and the state in which the EGU is located.

Commenters said because affected EGUs' abilities to reduce their emissions through EE, redispatch, or zero-carbon generation depend in large part on the policies and decisions of 

neighboring states and other actors on the interstate grid, it is unreasonable and arbitrary to 

require EGUs to achieve emission standards that are calculated solely based on the emission 

reductions that are supposedly achievable within the boundaries of the state. In addition, 

commenters said that because of the interconnected nature of the electric grid, it is difficult, if 

not impossible, to determine whether a particular megawatt-hour (MWh) generated at an RE 

facility or saved through EE actually led to a reduction in emissions from an existing, covered 

EGU. All generation on the grid, commenters noted, is effectively fungible, and an RE MWh is 

just as likely to displace another zero-carbon MWh (e.g., nuclear energy or a different form of 

more expensive RE) as it is to displace generation from a fossil-fueled affected EGU. Similarly, 

as demand grows, commenters noted that increased RE and EE could reduce the need for new 

fossil generation, while having no effect on the existing EGUs that EPA to regulate under this 

proposal.

Commenters said that, ironically, given that EPA has justified its broad "system" approach to 

BSER by referring to the interconnected nature of the grid, EPA's "building block" analysis is 

premised on the notion that the electrical grid in the United States can be disaggregated into fifty 

separate mini-grids that follow states borders. Commenters said that with that flawed premise, 

EPA examines each state's electrical generation resource mix and the amount of emissions those 

resources produce, and then establishes individual state requirements based on how each state 

can change its resource mix to make the desired amount of emission reductions. Commenters 

said that no consideration is given to the fact that both the nature of a state's generation mix and 

how much of that generation operates at any particular time is directly affected by the 

interconnectedness of the state's generation with other states' generation. Commenters said that at 

any particular time, resources within a state may be operating more or less depending on factors 

affecting supply, demand and operating conditions in a broad multi-state regional market.

Commenters stated that, given that EPA has justified its broad "system" approach to BSER by 

referring to the interconnected nature of the grid, EPA's building block analysis is premised on 

the notion that the grid can be disaggregated into fifty separate mini-grids that follow states 
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borders. Commenters said that EPA examines each state's generation resource mix and the 

amount of emissions those resources produce, and then establishes individual state goals based 

on how each state can change its resource mix to make the desired amount of emission 

reductions. Commenters said that no consideration is given to the fact that both the nature of a 

state's generation mix and how much of that generation operates at any particular time is directly 

affected by the interconnectedness of the state's generation with other states' generation. 

Commenters said that at any particular time, resources within a state may be operating more or 

less depending on factors affecting supply, demand and operating conditions in a broad multistate regional market. Commenters cited FERC Chair LaFleur:

"The Clean Air Act does things by state-by-state state implementation plans. That's how the 

Clean Power Plan draft last June is set up. The power markets, of course, do not operate state-bystate. So, I think there will be very considerable - potentially - implications for the operation of 

the markets as the states make all their implementation decisions." 

Commenters stated that EPA's approach therefore is not based on the operation of the grid as it 

exists in the real world. Commenters said that at the least, trying to superimpose individual state 

goals derived from EPA's imagined 50 "best systems" onto the actual real-world system will 

create significant inefficiencies and perverse incentives. Commenters said these systems thus 

cannot be described as "best."

Commenters stated that while the Plan's structure allows for multi-state or regional cooperation, 

EPA's single-state approach to calculating each state's emission reduction budget is 

fundamentally flawed. Commenters said the nation's power grids do not stop and start at state 

borders; rather, they form an intricate power network that cannot be disaggregated. Commenters 

said that many states will need to consult with other states in their region in order to evaluate if 

and how it would be possible to change their energy resource mixes -one source of power cannot 

simply be swapped out for another. Commenters said that for example, different sources of 

energy play different roles in supplying power. Commenters said coal and nuclear power have 

traditionally provided a steady base load of electricity, while natural gas has been used 

intermittently to supplement these base loads at times of peak usage. Commenters said natural 

gas fills this role well, as it can be ramped up and dispatched quickly. Commenters said that 

other renewables such as wind and solar, however, are inconsistent and need to be supported by 

other sources (such as coal and nuclear) in order to ensure the reliability of the power supply. 

Commenters said the idea that states can simply exchange one source for another, or forego 

certain types of energy entirely, is not realistic or feasible. Commenters said that for example, in 

West Virginia, EPA's plan is premised in part on the replacement of baseload coal fired 

generation with wind-based renewables - a power source that cannot be generated on demand. 

Commenters stated the biggest challenge in implementing the proposed rule is that electricity 

markets are interstate in nature, thus the proposal's state-by-state approach results in an 

enforcement regime that would be awkward at best, and potentially very inefficient and 

expensive. Commenters said the most concerning is assumption of increased "redispatch" of 

natural gas units of up to 70 percent and whether there will be sufficient pipeline capacity to 
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support this increase in natural gas generation. Commenters stated EPA's assumptions about each 

state's capabilities fail to account for the fact that slowing or shuttering perfectly good coal and 

gas plants and replacing them with windmills and solar arrays generally raise costs and diminish 

reliability. 

Commenters suggested the EPA consider performing its analysis on a generation and 

transmission basis, applying the d building blocks to each, and determining each generation and 

transmission utility’s compliance requirements, rather than by states. 

Response 4: As discussed in section V.A of the final rule preamble of the CPP, the final rule 

addresses these comments by adopting a region-by-region approach instead of a state-by-state 

approach to setting emission limits.

Comment 5: Commenters stated that EPA does not have the authority to impose different 

standards on each state.

Commenters stated the NPRM violates section 111(d) by setting substantially different BSER 

standards for each state. Commenters said as the Supreme Court has explained: "EPA issues 

emissions guidelines; in compliance with those guidelines and subject to federal oversight, the 

States then issue performance standards for stationary sources within their jurisdiction." 

Commenters said the EPA is allowed to set emissions guidelines that are national in scope and 

the states are authorized to determine their own state-specific approaches. Commenters stated the 

EPA is not empowered to set markedly different guidelines under section 111(d) using entirely 

different technologies for each state. Commenters stated the EPA's decision to set aggregate 

state-by-state emission guidelines rather than subcategorized, nationally applicable guidelines 

contradicts all of the EPA's other section 111(d) guideline rules as well as the legislative history 

of section 111(d). Commenters said other emission guidelines in part 60 of the existing EPA 

regulations establish nationally applicable emission guidelines based on adequately 

demonstrated, at-the-unit emission control techniques. Commenters stated the levels that 

individual units must achieve do not vary based on the political jurisdiction in which they happen 

to have been built. Commenters said yet the NPRM would require EGUs with similar 

characteristics to meet different emission limits based on their host state. Commenters stated this 

approach has no previous precedent and contradicts congressional intent for section 111, which 

was to eliminate disparities among states in the level of emission control that would be required 

of their major sources (Congress included section 111 so that EPA would set national emission 

standards that would "preclude efforts on the part of States to compete with each other in trying 

to attract new plants and facilities without assuring adequate control of . . . large-scale emissions 

therefrom."). Commenters said in this instance, however, the EPA has effectively proposed 

BSER differently for Georgia, South Carolina, and Tennessee as compared to the other states. 

Commenters said the EPA has determined that completion of "under construction" nuclear units 

constitutes BSER for these few states where those projects happen to be under construction. 
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Commenters stated the EPA does not have the authority to establish BSER on a state-by-state 

basis in the manner the EPA has done here.

Commenters stated that EPA's proposal is also unlawful because it imposes dramatically 

different emission reductions obligations on each State. Commenters said section 111 is 

inherently a source-based regulatory program and, to the extent that EPA seeks to administer the 

program directly, it must treat similarly situated existing sources in the same manner, regardless 

of the State in which they are located. Commenters said that by conducting its BSER analysis 

and proposing emission reduction targets at a Statewide rather than source-specific level, EPA is 

proposing a system where affected EGUs may be subject to different standards based solely on 

the fact that they are located in different States. 

Commenters stated, the Act does not allow for EPA to set varying emissions rate targets among 

the states. Commenters said, section 111(d) outlines a process for EPA to establish a procedure, 

similar to the procedure under Section 110 (National Ambient Air Quality Standards 

("NAAQS") of the Act, for the states to then implement and establish standards of performance. 

Commenters said, the Act, in either Section 111 or Section 110, does not command or allow 

EPA to establish state-by-state standards. Commenters said, rather, national standards are 

established and then the states are tasked with implementing; there are no separate NAAQS 

standards for individual states.

Commenters stated, of course the NAAQS allow for regional differences in standards within 

discrete states for nonattainment standards. Commenters said, however, the process for 

establishing these regional standards and the reasons that they are established are further 

evidence that EPA cannot promulgate state-by-state rules as it has done in this Rule Proposal. 

Commenters said, first, there are entire sections of the CAA and associated rules contemplating 

rules for nonattainment areas to account from departures from national standards; this is not the 

case in Section 110. Commenters said, second, nonattainment areas (with emissions standards 

departing from the national norm) are based on differences in the air quality in the region and are 

not based on differences in the generation technologies or the means or ability for those 

technologies to comply. Commenters said, for a global pollutant such as CO2, there are no 

regional differences that would require any differentiation; EPA has acknowledged this fact. 

Commenters said, third, the thresholds and tiers of nonattainment limitations are consistent 

across the country; so a region with the same air quality concerns in Florida would have the same 

limitations as a similarly situated region in California. Commenters noted, again, this type of 

consistency is not provided for in this Rule Proposal. Commenters said, EPA's one alleged 

attempt at creating some kind of uniformity, EPA's flawed BSER analysis (discussed in greater 

detail throughout this letter), again is not driven by any air quality concerns, but rather is driven 

primarily by the existing generation mix of the state.

Commenters stated, the practical effect of having different limits for each state is that EGUs of 

the same source category, potentially even the exact same EGU technology, sitting across state 

lines may ultimately be subject to wildly different, federally mandated, emissions standards. 

Commenters said, this would depend on factors such as differences in those states' existing 
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generation mix or the availability of natural gas or renewable resources. Commenters said, this 

would not depend, however, on the technology or operations implemented at those facilities. 

Commenters said, this type of arbitrary result is in direct contravention of Section 110 and the 

CAA as a whole.

Commenters stated the proposed rule places a higher burden on some states to achieve the 

required reductions vis a vis other states, explaining that Florida's "state goal" under the 

proposed rule is one of the most demanding in the country while other states that have done 

relatively little in the way of reducing greenhouse gas emissions have far less demanding "state 

goals." 

Commenters stated, the Proposed Rule would establish separate emission rate targets for every 

state, based on EPA's projections of the emission reductions the affected EGUs in each state 

could achieve through both at-the-unit and beyond-the-unit measures. Commenters said, in 

effect, EPA has subcategorized the fossil-fueled boiler and gas turbine-source categories based 

on the political jurisdiction in which the EGU is located. Commenters said, such a state-by-state 

approach is neither authorized by statute nor envisioned by EPA's regulations. Commenters said, 

rather, the legislative history of section 111(d), EPA's regulations, and previous court cases make 

clear that section 111(d) guidelines set nationwide performance levels that apply to all sources 

within a source category regardless of their location, unless EPA makes a supported finding that 

subcategorization - based on factors other than political jurisdiction - is appropriate.

Commenters stated, section 111(d) was originally conceived as section 114 of the Senate version 

of the 1970 CAA Amendments. Commenters said, as passed by the Senate, the provision that 

would become section 111(d) was captioned "National Emission Standards - Selected Air 

Pollution Agents." Commenters said, it is apparent from this caption that the Senate intended to 

authorize EPA to establish nationwide emission limits that would not discriminate against 

existing stationary sources based on what state the affected sources happened to be located. 

Commenters said, in the final version of the 1970 CAA Amendments, section 114 was combined 

with section 113 of the Senate bill, modified to give states a greater role in setting emission 

limits for existing sources, and incorporated into section 111 as subsection (d). Commenters said, 

although the final version of section 111(d) did not include the same caption as the Senate bill, 

the Conference Report made clear that Congress' intent was still that EPA would set national 

emission standards in order to "preclude efforts on the part of States to compete with each other 

in trying to attract new plants and facilities without assuring adequate control of . . . large-scale 

emissions therefrom." 

Commenters stated, the Act's subsequent legislative history confirms that section 111 was 

intended to create an even, national playing field for all sources within each source category. 

Commenters said, for example, Congress viewed uniform national standards to be necessary "to 

avoid situations in which industries could be lured to one State by relaxing emission standards or 

deadlines and away from other States with stricter standards" and "to avoid favoring some areas 

of the country over others . . . ." Commenters said, indeed, EPA itself argued, in 1975, that the 

absence of the word "national" from the caption for section 111 should not be taken as a sign that 
219

Congress had thought better of its decision to authorize "national criteria" for existing sources. 

Commenters said, finally, it is relevant that although section 111(d) specifies that EPA must 

allow states to take into account, "among other factors, the remaining useful life" of individual 

sources, it does not authorize EPA to set state-by-state emission guidelines. Commenters said, 

section 111(b)(2) - which authorizes EPA to subcategorize within new source categories -

likewise provides no indication that EPA may subcategorize based on political jurisdiction. 

Commenters stated, EPA's implementing regulations for section 111(d) reflect the understanding

that emission guidelines are to be set on a source-category-wide basis, except where certain 

factors - not including the state (political) jurisdiction in which a source is located - make 

subcategorization appropriate. Commenters said, for example, EPA's regulations require EPA to 

issue a guideline "that reflects the application of the best system of emission reduction 

(considering the cost of such reduction) that has been adequately demonstrated for designated 

facilities" - not for designated states or state economies. Commenters said, the regulations also 

require EPA "specify different emission guidelines or compliance times or both for different 

sizes, types, and classes of designated facilities when costs of control, physical limitations, 

geographical location, or similar factors make subcategorization appropriate." Commenters said, 

however, neither the statute nor the regulations allow EPA to treat similarly situated EGUs 

differently based solely on the state where they happen to be located.

Commenters stated, in light of clear Congressional intent that EPA's regulations under section 

111 would set nationwide standards (with subcategorization where appropriate), EPA's failure to 

explain its authority for setting 49 different emission guidelines for 49 states is arbitrary, 

capricious, and contrary to law. Commenters said, although EPA can (and should) subcategorize 

among existing EGUs based on permissible factors such as cost, technology type, physical 

limitations, unit age, etc., EPA may not subcategorize based solely on the political jurisdiction in 

which the EGU is located. Commenters said, EPA's decision to do so by setting state-by-state 

emission goals thus exceeds its authority under the Act.

Commenters stated, the EPA has proposed a state-by-state emission rate for CO2, which is a 

standard that cannot be monitored for compliance during operation. Commenter said the EPA is 

imposing a requirement on the state itself, rather than an emission standard for affected sources. 

Commenters said, in fact, it treats nearly identical sources in different states very differently. 

Commenters said, rather than creating a standard for the NSPS regulated source, the EPA is 

creating a standard for the states, but the states are not sources under the CAA or EPA 

regulations. Commenters said, states are not listed in 40 CFR Part 60. Commenters said, 

moreover, the EPA's unequal and inequitable treatment of states vis-a-vis one another and 

sources within different states demonstrates the patent arbitrariness of the EPA's proposal and 

another reason why it is unconstitutional.

Commenters stated, the EPA has created de facto source subcategories by state, but there is no 

legal basis for this. Commenters said, in its concurrent section 111(b) proposal the EPA states:
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Once the EPA has determined that a particular system or technology represents BSER, the EPA 

must establish an emission standard based on that technology.

Commenters stated, even if the EPA's 4-Building Block approach were lawful, establishing 50 

different emission rates is not only unprecedented, but also it proves that the EPA has failed to 

determine a system that establishes an emission rate. Commenters said, while the Building Block 

approach has flaws of its own, these flaws are magnified by failing to apply the "particular 

system" uniformly. Commenters said, the Building Blocks get applied in whole or in part not 

because of any aspect of the affected sources the EPA is authorized to regulate under the CAA, 

but because of the current makeup of both regulated and non-regulated electricity producing and 

conserving facilities within a particular state.

Response 5: The EPA disagrees with the commenters for the reasons discussed in section V.A. 

of the final rule preamble of the CPP.

Comment 6: Commenters opposed state-wide goals because they result in significant disparities 

among the states and different standards for similar EGUs; Commenters recommended the EPA 

set national goals. 

Commenters argued that setting different CO2 emission targets on a state-by-state basis would 

hold similarly situated EGUs located in different states to different emission reduction standards, 

even if they are identical EGUs built at the same time using the same technology, simply because 

of the availability of combined cycle natural gas facilities or renewable energy resources in the 

states where they are located.

Commenters argued that a central premise of any fair and reasonable regulatory scheme is that 

like sources should be treated similarly, and this is particularly true in the case of GHG 

emissions where the pollutant at issue is truly global in nature and there are no localized impacts 

that could justify treating similar sources differently. Thus, after taking into account remaining 

useful life and other related factors, commenters concluded that the standards of performance 

established under Section 111(d) should essentially apply uniformly to all existing sources, and 

EPA's proposed emission reduction targets fail to meet this requirement.

Commenters stated that the methodology by which EPA has determined BSER is flawed as it 

results in different targets (CO2 budgets) for each state, and therefore for EGUs in each state. 

Commenters stated that the historical implementation of Section 111(d) demonstrates that 

Congress intended EPA to set BSER on a national basis. Commenters stated that EPA's proposed 

interpretation of BSER utilizing a methodology that results in such disparate standards for 

similar EGUs demonstrates that this approach is flawed and contrary to the plain reading of the 

CAA.

Commenters stated that section 111 standards to date have been designed to assure that units all 

over the country can meet the standards, i.e. the standards must be achievable by the affected 
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sources. Commenters said, standards that are achievable for new sources have been set by EPA 

at the source, as required by Section 111(b), with sub-categorization to assure that outcome. 

Commenters said, in the proposal for existing sources, EPA has set highly dissimilar binding 

goals for the states, based on varying state BSER requirements resulting from the four BBs, in a 

manner that causes disparate cost and competitive impacts amongst the states. Commenters said, 

EPA's proposed state BSER goals vary from 11% to 72% emission rate reductions by 

2030. Commenters said, some states can continue to operate most of their coal plants while other 

states are forced to close 90 to 100% of their coal plants, resulting in tremendous stranded 

investment costs which EPA failed to include in the cost accounting of the rule. Commenters 

said, this disparate treatment, concerning what are supposed to be state-set standards that are 

achievable by existing units throughout the country, is arbitrary and capricious.

Commenters stated their major concern with the states' emission targets is that the supporting 

documentation do not reveal any rationale for the emission rates that are proposed. Commenters 

said, the rates assigned to individual states vary substantially and for reasons they find difficult to 

comprehend. Commenters believed that some states could conceivably be allowed to actually 

increase emissions of GHGs. Commenters provided eight examples of groups of states with 

widely varying emission reduction targets and stated that the examples are only some their 

observations that they believed raise questions for which the proposal does not provide answers. 

Commenters said, the rationale of EPA appears to be an acknowledgment that each state is 

different and faces different challenges and opportunities for reducing GHG emissions. 

Commenters argued that the Clean Air Act does not authorize the EPA to “invent a plan for 

reducing emissions from existing sources without actually imposing requirements on existing 

sources and then allocate obligations to each of the states based on what in some opinion of EPA 

each state is capable of accomplishing.” 

Commenters stated, EPA fails to justify its assignment of unequal carbon reduction targets to 

different states and does not adequately address the implications of this unequal treatment.

Commenters stated, the EPA has assigned a 2030 emissions goal of 772 lbs/MWh to South 

Carolina. Commenters said, the average emission rate across the county in 2030 is 1016 

lbs/MWh. Commenters said, South Carolina starts with 1587 lbs/MWh (above the national 

average of 1474 lbs/MWh) and is required to reduce CO2 emissions by the largest amount (815 

lbs/MWh) in the country. Commenters said, the 772 lbs/MWh required of South Carolina is far 

below the 1100 lbs/MWh new source standard in the Section 111(b) rulemaking governing NEW 

fossil plants. Commenters said, the irrational result of the EPA formula applied to South Carolina 

is that the existing plants (which are the subject of this rulemaking) are required to be less carbon 

intensive than new plants. Commenters said, the state-based, rather than source-based, 

implementation plan proposed by the EPA results in the outcome that similar existing generation 

resources will be treated drastically different. Commenters said, this is contrary to the legislative 

history of 111(d) which was intended to create a uniform national standard which would "avoid 

situations in which industries could be lured to one State by relaxing emission standards or 

deadlines and away from other states with stricter standards ...." Commenters said, since each 

state has been treated differently, it is likely that each state may treat EGUs differently. 
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Commenters said, it is possible under this proposed scenario that EGUs similarly situated will be 

treated differently, resulting in winners and losers among the EGUs, and winners and losers 

among the states. Commenters said, rather than providing a comprehensive national standard as 

it has done for new generators, the EPA has chosen to arbitrarily assign emission reduction goals 

among the states and some states, including South Carolina, are bearing a disproportionately 

difficult burden. Commenters said, although EPA is allowed to subcategorize among existing 

EGUs based on permissible factors such as cost, technology type, physical limitations, unit age,

etc., EPA may not subcategorize based solely on the political jurisdiction where an EGU happens 

to be located. Commenters said, this unfair, arbitrary and unauthorized implementation plan is 

inconsistent with 111(d) and in excess of the authority granted to the EPA under the Clean Air 

Act.

Commenters stated the use of the states as the basis for the carbon targets is problematic because 

it creates considerable inequities between states in terms of the level of reductions required. 

Commenters stated further, it ignores the basic facts that most operating companies have 

generation in multiple states, and regional transmission organizations like PJM and MISO also 

operate in multiple states.

Response 6: For the reasons discussed in section V.A of the final rule preamble of the CPP, the 

final rule addresses this concern by establishing emission guidelines based on uniform 

nationwide limits on steam generators and combustion turbines. 

The final rule applies the applicable building blocks uniformly to steam EGUs and to combustion 

turbines within the three Interconnections, and establishes uniform source subcategory-specific 

emission performance rates for steam EGUs and for combustion turbines.

Comment 7: By imposing binding emission reduction targets on a state-wide rather than sourcespecific basis, EPA is inviting the States to impose inconsistent obligations on individual 

facilities in their implementation plans.

Commenters stated that by imposing binding emission reduction targets on a Statewide rather 

than source-specific basis, the EPA is inviting states to impose inconsistent obligations on 

individual facilities in their implementation plans. Commenters said the EPA appears to take the 

position that States will have complete discretion to impose emission reduction obligations solely 

on affected EGUs or on a broader range of affected facilities through a "portfolio" approach. 

Commenters said nowhere does EPA indicate that States must treat similarly situated EGUs in a 

similar fashion.

Commenters stated for example, States could potentially impose more stringent emission limits 

on certain coal-fired EGUs in an attempt to dictate which facilities within a State will be forced 

to close. Commenters said this is of particular concern in States that export significant amounts 

of electricity. Commenters said that by targeting companies that export significant portions of 

their generating capacity with larger emission reduction obligations, States could effectively 
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export the costs of compliance to rate payers in neighboring States, while minimizing the inState effects of the rule. Commenters said an approach that shifts compliance costs to out-ofState rate payers would embody the type of economic protectionism that national pollution 

control programs are designed to avoid. Commenters said that imposing source-specific 

standards of performance on affected EGUs would avoid the temptation for States to impose 

differing standards on similarly situated EGUs in an effort to protect their own residents and 

export the costs of complying with the rule. 

Commenters stated that EPA's approach has no precedent in EPA's prior Section 111(d) actions. 

Commenters stated that, in most if not all cases, the result is likely to be a substantial variation in 

the degree of control required for particular sources, rather than identical standards for all 

sources." Commenters stated that 40 Fed. Reg. at 53,343. Commenters stated that under the 

Agency's own Subpart B rules (i.e., 40 C.F.R. Section 60.20 - 60.29), States have considerable 

flexibility to deviate from EPA's emission guidelines in adopting plans and emission standards. 

Commenters stated that states may apply "less stringent emissions standards or longer 

compliance schedules" to particular facilities or classes of facilities if the costs of adopting the 

standards suggested by the emission guidelines would be unreasonably costly, physically 

impossible, or for other reasons. See 40 C.F.R. Section 60.24(f)(1)-(3). 

Response 7: We disagree with the commenters. As discussed in section V.A of the final rule 

preamble of the CPP, the final rule addresses these comments by adopting weighted-average 

state goals that reflect the application of uniform CO2 emission performance rates for affected 

steam EGUs and affected NGCC units located in each state. For the reasons discussed in section 

V.B.6 of the preamble, States have broad discretion in assigning emission limits to their 

individual sources under CAA section 111(d)(1). 

Comment 8: Commenters supported state-wide performance levels and stated that they are 

reasonable and consistent with EPA’s authority under the Clean Air Act.

Commenters stated, they strongly support EPA's decision to propose state goals in the form of 

average performance levels that reflect state-wide application of the BSER. Commenters said, as 

EPA recognizes in the preamble this approach has clear policy advantages. Commenters said, 

because CO2 is a dispersed pollutant whose effects on the atmosphere are the same regardless of 

where it is emitted, EPA's averaging approach is as environmentally effective as an alternative 

approach establishing guidelines specific to particular EGUs. Commenters said, at the same time, 

the averaging approach allows each state valuable flexibility to determine the most locally 

appropriate mix of measures to reduce carbon pollution - and to establish standards of 

performance for individual EGUs that recognize the unique circumstances of specific facilities. 

Commenters said, for example, the proposed state-wide averaging approach automatically takes 

into account reductions in carbon intensity associated with shifting generation from highemitting EGUs to lower-emitting facilities, and allows states to flexibly adjust the amount of 

dispatch shift that occurs in their generating fleet both geographically and over time. 
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Commenters said, similarly, the statewide averaging approach allows states to themselves put in 

place flexible, averaging compliance frameworks to capture emission reductions attributable to 

zero-emitting resources, such as renewables. Commenters said, lastly, the state-wide averaging 

approach is also compatible with existing state programs, such as renewable portfolio standards 

and emissions trading programs, which could be incorporated into state plans and used to meet 

the state goals. Commenters said, given the interconnected nature of the power sector and the 

fact that the most cost-effective, well-established techniques for reducing carbon pollution from 

existing EGUs rely on reducing aggregate emissions from the power sector, EPA's approach is 

eminently reasonable.

Commenters stated, EPA has appropriately determined that a more flexible averaging system 

best satisfies the statutory factors in the unique context of carbon pollution from the power 

sector. Commenters said, flexible averaging programs implemented under the Clean Air Act and 

by states and companies have demonstrated that they can significantly lower the cost of cutting 

pollution because they facilitate capture of the lowest-cost emission reduction opportunities. As 

an example, the commenters stated that a recent survey of economic research found that the 

Clean Air Act's flexible Acid Rain Program has achieved "a range of 15-90 percent savings, 

compared to counterfactual policies that specified the means of regulation in various ways and 

for various portions of the program's regulatory period." (see Gabriel Chan, Robert Stavins, 

Robert Stowe & Richard Sweeney, The SO2 Allowance Trading System and the Clean Air Act 

Amendments of 1990: Reflections on Twenty Years of Policy Innovation, at 5 (2012), available 

at http://belfercenter.ksg.harvard.edu/files/so2-brief_digital4_final.pdf.)

Commenters said, in the context of carbon pollution standards for existing power plants, a 

flexible averaging framework that rigorously quantifies the emission reductions achieved via 

increased utilization of lower and zero-emitting generation and investments in demand-side 

energy efficiency can achieve very substantial carbon pollution reductions cost-effectively while 

enabling proactive management of generation capacity and enhancement of grid reliability. 

Commenters said, indeed, a flexible system will facilitate efficient compliance not only with the 

Clean Power Plan but also with other applicable air quality and energy regulations, allowing 

states and companies to make sensible investments in multi-pollutant emission reductions and 

clean, safe, and reliable electricity infrastructure. Commenters said, such a system will enable 

states to consider the "remaining useful life" of sources as the Clean Air Act provides and 

optimize investments in existing and new generation to secure the necessary emission reductions. 

Commenters said, a flexible system that facilitates a variety of emission reduction pathways is 

also the system already being deployed by a number of states and companies, mobilizing 

innovative emission reduction measures and securing significant reductions in carbon pollution. 

Commenters said that some have suggested that the general Clean Air Act definition of "standard 

of performance" in section 302(l) also applies in the context of section 111, and precludes an 

averaging approach because it requires "continuous emission reduction." Id. section 7602(l). The 

commenters thought it is unlikely that the section 302(l) definition applies given that Congress 

provided a specific and different definition of the term "[f]or purposes of" section 111, 42 U.S.C. 

section 7411(a). However, the commenters noted that even if section 302(l) were found to apply, 
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an averaging approach qualifies as "a requirement of continuous emission reduction" per the 

section 302(l) definition because covered sources must collectively achieve the emission 

limitations, which apply continuously. Even in a flexible program, commenters argued, each 

source meets its obligations continuously. Under an averaging framework, commenters asserted, 

each source must secure the emission reductions needed, onsite or from other plants, to 

continuously be in compliance with the standard. Commenters also noted that the generally 

applicable definition of "emission standard" in section 302(k) likely does inform the otherwise 

undefined phrase "standard for emissions" within the definition of "standard of performance" in 

section 111(a)(1). See 42 U.S.C. section 7416 (referring to an "emission standard or limitation . . 

. under section 7411"). A section 302(k) "emission standard" or "emission limitation" is defined 

as "a requirement . . . which limits the quantity, rate, or concentration of emissions of air 

pollutants on a continuous basis." Id. section 7602(k) (emphasis added). Commenters believed an 

averaging approach qualifies as an "emission standard" or "emission limitation," because 

covered sources must meet a limitation that applies continuously. Commenters noted that 

Congress used the term "emission limitation" in 1990 to describe its Acid Rain Program. See id. 

sections 7651b(a)(1), 7651c(a).

Commenters said, EPA's proposed approach is also fully consistent with the Clean Air Act. 

Commenters said, first, as the preamble explains, section 111(d) itself does not preclude EPA's 

emission guidelines from applying the BSER on a state-wide basis or expressing the guidelines 

as an average performance level for each state. Commenters said, EPA issues emission 

guidelines as part of its statutory responsibility under section 111(d) to ensure that state plans are 

"satisfactory," in that they establish, implement, and enforce "standards of performance" that 

reflect EPA's judgment as to the BSER for existing sources. Commenters said, the statute does 

not preclude the emission guidelines from specifying an average level of performance that 

reflects the BSER, and that sets the degree of stringency that will be required for "satisfactory" 

state plans. Commenters said, EPA's proposed approach is an appropriate application of the 

broad language of section 111(a)(1) and (d) to the unique circumstances affecting the power 

sector, which as noted above consists of a diverse population of interconnected sources.

Commenters stated, EPA's proposal is consistent with the way EPA (and the courts) have 

flexibly applied the Clean Air Act to complex source categories, including the power sector. 

Commenters said, under section 110(a)(2)(D) of the Clean Air Act, for example, EPA has 

adopted a series of rulemakings that limit interstate transport of NOx and SO2 from the power 

sector by establishing state-wide emission budgets based on state or regional application of 

pollution control measures. Commenters said, in the case of the 1998 NOx SIP Call, these 

budgets were based on IPM modeling of a multi-state emissions trading system designed to 

achieve an average emission rate expressed in pounds per unit of heat input - taking into account 

changes in dispatch and other measures available to reduce aggregate NOx emissions from the 

power sector. Commenters said, similarly, EPA's 2011 Cross State Air Pollution Rule - recently 

upheld by the Supreme Court as a "permissible, workable, and equitable interpretation" of 

section 110 - established state-wide budgets for NOx and SO2 that were based on power sector 

modeling of emission reductions achievable through "increased dispatch of lower-emitting 
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generation" and fuel-switching, among other compliance options. Commenters said, in both of 

these major power sector rulemakings, EPA established state-wide emission targets that reflected 

system-based measures to achieve aggregate emission reductions from the power sector - just as 

EPA proposes to do here. 

Commenters stated, in addition, the Clean Air Act provides that the procedure for establishing 

standards of performance for existing sources under section 111(d) is to be "similar" to that of 

section 110, and section 110 expressly provides that emission limitations and control measures 

can include "fees, marketable permits, and auctions of emissions rights." Commenters said, the 

direct link to section 110 thus further reinforces the appropriateness of such flexible approaches 

under section 111(d). Commenters said, EPA has also applied averaging approaches extensively 

in setting emission standards for mobile sources and fuels. Commenters said, under Title II of the 

Clean Air Act, EPA has long interpreted its authority to establish "emission standards" for motor 

vehicles to allow for average standards that apply to broad categories of vehicles and engines. 

Commenters said, in promulgating its first particulate matter and NOx emission standards for 

heavy duty vehicles in 1985, EPA defended the averaging concept as "fully consistent with the 

technology-forcing mandate of the Act" and essential to establishing rigorous standards for a 

diverse group of sources. cited Control of Air Pollution from New Motor Vehicles and New 

Motor Vehicle Engines; Gaseous Emission Regulations for 1987 and Later Model Year LightDuty Vehicles, and for 1988 and Later Model Year Light-Duty Trucks and Heavy-Duty Engines; 

Particulate Emission Regulations for 1988 and Later Model Year Heavy-Duty Diesel Engines, 

50 Fed. Reg. 10,606 (Mar. 15, 1985) (describing averaging system and noting that it is similar to 

the averaging system established for light-duty vehicles and trucks in 1983). quoted the 

following from these sources: "Private and state sponsored environmental groups, as well as the 

Manufacturers of Emission Controls Association (MECA), claimed that averaging as proposed 

was inconsistent with EPA's responsibility under section 202(a)(3)(A)(iii) of the Act to set 

standards that require use of the best technology that is expected to be available at the time the 

standards are implemented" The Agency finds the averaging concept, as applied by the standards 

promulgated, to be fully consistent with the technology-forcing mandate of the Act. Particulate 

trap technology is heretofore untried on the fleet level. EPA believes that the 0.25 g/BHP-hr 

standard which, through averaging, effectively requires use of traps on 70 percent of all heavyduty vehicles will significantly reduce the risk of widespread noncompliance while allowing 

manufacturers to gain valuable experience with this new technology. To promulgate this 

standard without allowing averaging. . . would increase the technological risk associated with the 

standard because traps would have to be used in even the most difficult design applications."

Commenters said, the D.C. Circuit specifically upheld EPA's use of averaging in those standards 

- noting the "absence of any clear evidence that Congress meant to prohibit averaging" and the 

reasonable policy arguments EPA advanced in favor of the approach. Commenters said, 

similarly, EPA's regulations phasing out lead in gasoline took the form of an average standard 

for the "total pool" of gasoline produced by each refiner; EPA's assumption that refiners would 

participate in a yet-to-be created inter-refinery credit trading system, which was integral to the 

stringency of the standard, was likewise upheld by the D.C. Circuit. Commenters said that the 
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early standards were also upheld by the D.C. Circuit, see Ethyl Corp. v. EPA, 541 F.2d 1 (D.C. 

Cir. 1976), and Congress effectively ratified EPA's approach in 1977 by enacting a special 

provision for small refiners prescribing maximum levels of stringency for average lead limits.

Commenters stated, thus, average standards such as those proposed in the Clean Power Plan are 

a time-tested regulatory approach under the Clean Air Act and a reasonable application of the 

ambiguous language of section 111. Commenters said, in the context of section 111 and 

greenhouse gas emissions, a flexible system that enables a wide variety of available solutions to 

achieve rigorous and cost-effective carbon pollution reductions manifestly fulfills the statutory 

criteria for the "best" system.

Response 8: The EPA agrees with the commenters. However, as discussed in section V.A of the 

preamble, the final rule adopts weighted-average state goals that reflect the application of 

uniform CO2 emission performance rates for affected steam EGUs and affected NGCC units 

located in each state.

Comment 9: Commenters supported the EPA’s proposal to establish differentiated performance 

standards on a state-by-state basis. 

Commenters stated, it is reasonable for the EPA to establish different performance standards (or 

targets) for each state in order to reflect differences in the states' current electric generation 

mixes and future emission reduction capabilities. Commenters said, existing EGUs differ from 

other types of sources previously regulated under section 111(d) in several important respects. 

Commenters said, most source categories covered by past section 111(d) guidelines have 

consisted of small numbers plants operating independently at significant distances from one 

another, and emitting pollutants with localized impact. Commenters said, state-by-state target 

differentiation did not arise as an issue for these source categories.

Commenters stated, in contrast, there are more than 1500 fossil-fueled EGUs that are 

functionally interconnected and interdependent in the electric grid, and they emit carbon dioxide, 

a pollutant that mixes uniformly in the atmosphere on a national and global basis. Commenters 

said, further, the distribution of fossil-fueled EGUs differs from state to state, with some states 

having predominantly coal-fired units, others having predominantly gas-fired units, and others 

various mixes in between. Commenters said, in addition, the distribution of system-wide 

emission reduction opportunities from non-fossil generating resources (renewables, nuclear, 

hydro) and energy savings investments also varies from state to state.

Commenters stated, in this context - and especially since section 111(d) provides for state-bystate implementation - it is reasonable for EPA to aggregate fossil-fueled EGUs by state and set 

differentiated targets on a state-by-state basis. Commenters said, this approach solves a 

significant problem with respect to the uneven distribution of types of EGUs: framing targets in 

terms of reduction from a baseline year, and differentiating those targets across the states makes 
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it feasible to cost-effectively obtain the most CO2 reductions across the system. Commenters 

said, EPA's choice to set differentiated standards by state in this manner is reasonable.

Response 9: The EPA agrees with the commenters. As discussed in section V.A of the final rule 

preamble of the CPP, the final rule addresses these comments by adopting weighted-average 

state goals that reflect the application of uniform CO2 emission performance rates for affected 

steam EGUs and affected NGCC units located in each state.

Comment 10: Commenters agreed the EPA has authority under CAA section 111(d) to use a 

sector-based approach to determine the BSER on a state-wide basis 

Commenters supported the EPA’s approach for determining and applying BSER on a state-wide 

basis. Commenters said that the EPA has set forth adequate and sound legal bases for its 

approach in the preamble and the Legal Memorandum. 

Response 10: The EPA disagrees with the commenters for the reasons discussed in section V.A 

of the preamble. 

Comment 11: Commenters stated that there is no technical basis for basing emissions on state 

boundaries and that there should be national standards that do not categorize EGUs based on 

location. 

Commenters stated that previous rules and legislative history support a nationwide performance 

guideline. Commenters stated that EPA's proposal to establish different emission performance 

targets for existing EGUs based solely on the political jurisdiction in which they are located 

represents a break with the agency's previous interpretations of section 111(d) and appears to be 

precluded by the legislative history of this provision. Commenters stated that in the past, EPA 

has always established uniform emission guidelines for existing sources that prescribe emission 

targets for individual categories or subcategories of stationary sources on a nationwide basis. 

Response 11: The EPA disagrees with the commenters for the reasons discussed in section V.A 

of the final rule preamble of the CPP. 

Comment 12: Commenters stated that there is no precedent for the proposed approach of setting 

state-wide emission rates under CAA section 111(d). 

Commenters stated that EPA ignores the precedence set by all of its previous guidelines wherein 

the EPA set source-category emission rates that could then be tailored by each State to fit the 

individual sources within the State. Commenters noted that the approach the EPA followed in its 
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previous guidelines allows states to make exceptions for specific "facilities or classes of 

facilities" and to take into account the remaining useful life of the source and other factors (see 

40 CFR Section 60.24(f)). Commenters stated that EPA has never before set mandatory Statewide emission rates under Section 111(d). Commenters stated that there is no precedent under 

the EPA's historical practice or its own implementing regulations for the approach the Agency 

has proposed for the CPP.

Response 12: The EPA disagrees with the commenters for the reasons discussed in section V.A 

of the final rule preamble of the CPP. 

Comment 13: State-by-state emission goals are impractical for Tennessee Valley Authority

Commenters stated the EPA's proposal to establish state-by-state emission goals is impractical 

for the Tennessee Valley Authority (TVA) because it fails to recognize that some of TVA's 

generating units are located in a seven-state region and operates as one integrated generation and 

transmission system. State-by-state environmental controls, the commenters argued are not 

feasible for TVA because they would impair reliability of electric power supply.

Response 13: As discussed in section V.A of the final rule preamble of the CPP, the final rule 

addresses these comments by adopting weighted-average state goals that reflect the application 

of uniform CO2 emission performance rates for affected steam EGUs and affected NGCC units 

located in each state.

Comment 14: Commenters expressed concerns with EPA's overall framework for establishing 

the "best system of emission reductions" (see UNS Comments); however, Commenters stated 

that EPA should be consistent in its application of the framework as it applies to states, U.S. 

territories and areas of Indian country.

Response 14: For EPA’s response to this comment please see section V.A of the final preamble 

for the CPP.

1.10.7 Severability

Comment 1: EPA does not have authority to assert that the building blocks are not severable.

Commenters questioned whether or stated that, an agency declaration that a regulatory provision 

is severable only gives rise to a presumption of severability and that the ultimate decision on 

severability must be made by a court, not EPA. Commenters said, in INS v. Chadha, the 
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Supreme Court explained that the "the invalid portions of a statute are to be severed unless it is 

evident that the Legislature would not have enacted those provisions which are within its power, 

independently of that which is not." Commenters said, put another way, a statute is severable if 

what would remain after severance is "fully operative as a law." Commenters said, by contrast, 

"if the balance of the legislation is incapable of functioning independently" once the unlawful 

portion is stricken, a court must presume that the provision was not intended to stand alone. 

Commenters stated, the standard for severability as established in Alaska Airlines, Inc. v. Brock 

is clear: courts must first determine whether Congress intended the provisions to operate 

separately, and then whether the provisions can function separately if it did. Commenters said, 

the same standard of severability applies to regulations. Commenters said, the Section 111(d) 

rule cannot satisfy the Alaska Airlines two-prong test. 

Commenters said, this is an invalid and illegal approach to establishing BSER, because it 

intentionally places the court in the role of regulator - effectively making the courts choose 

whether to raise or lower emissions limits in the Rule. Commenters said, EPA cannot assign the 

role to the courts to piece together this Rule Proposal, but rather, the Rule must be reviewed in 

whole and cannot be broken apart at the judicial level.

Response 1: The D.C. Circuit has long held that “[w]hether an administrative agency’s order or 

regulation is severable . . . depends on the issuing agency’s intent.” North Carolina v. FERC, 730 

F.2d 790, 795-96 (D.C. Cir. 1984); see Davis Cnty. Solid Waste Mgmt. v. EPA, 108 F.3d 1454, 

1459 (D.C. Cir. 1997). In this rulemaking, the EPA has expressed its clear intent, and explained 

its determination, that in the event a building block were invalidated, the remaining combinations 

of building blocks would continue to constitute the “best system of emission reduction.” With 

the exception of building block 1 acting in isolation – as noted below – all remaining 

combinations of the building blocks would be functional, cost-effective means of reducing 

emissions of CO2 from affected EGUs. Because the BSER reflects those measures that the EPA 

has determined are achievable, cost-effective, and demonstrated approaches for reducing 

emission from affected EGUs, the EPA believes all three building blocks are lawful and will 

withstand judicial scrutiny.

Comment 2: Building blocks are not severable because they do not operate independently.

Commenters stated, the building blocks cannot function independently and are not severable, so 

the invalidity of any one of them requires that they all be stricken. Commenters said the 

Proposal's BSER requirements are interrelated and the final emissions targets are dependent on 

each block being implemented. 

Commenters said, for example, EPA asserts that if reductions under one Building Block do not 

materialize, the necessary emission reductions must come from the other Building Blocks. 

Commenters said, that means the Building Blocks are not independent, but are closely and 
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inextricably related. Commenters stated, further, it is not clear from the proposal whether EPA 

would in fact have relied on remaining Blocks as "BSER" once invalid Blocks were stricken.

Commenters said, U.S. EPA is setting state goals based on what is achievable from a national 

perspective and not looking at individual state characteristics such as sufficiency of the natural 

gas pipeline or what HRIs have already occurred at specific units. Commenters said, if the 

combination of the four building blocks is the "best system" that has been "adequately 

demonstrated," severing one or more of the building blocks would result in a system that cannot 

be considered the "best" or to have been "adequately demonstrated." Commenters said, if any 

single building block is invalidated, the perceived "flexibility" being afforded to states under this 

approach becomes more strained, the goals may be unachievable, and the entire plan must be 

revised.

Commenters noted for instance, operating a coal-fired EGU at sub-optimal levels (a result of 

applying any or all of Building Blocks 2 through 4) will adversely affect its heat rate, thus 

hindering it from achieving the emission reductions required under Building Block 1. The 

commenters said, EPA has not explored these interrelationships in the preamble, because it 

simply assumes all four Building Blocks will be finalized. Several commenters said, if one or 

more of the Blocks is invalid, the entire system must be revised or stricken, performance goals 

adjusted, and EPA must properly assessed whether the remaining Block or Blocks still constitute 

BSER.

Commenters said, when discussing severability in the proposed modified and reconstructed 

source rule U.S. EPA cites to a court case "holding that a regulation was severable because '[t]he 

severance and invalidation of [the subsection at issue would] not impair the function of the 

statute as a whole . . . ." Commenters said, it is no wonder that U.S. EPA does not try to apply 

the holding of that case to this proposed rule. Commenters said, because U.S. EPA considers the 

"best system" to be a combination of the four building blocks, severing one can only be viewed 

as impairing the function of Section 111(d) as a whole under U.S. EPA's conception of the 

statute.

Response 2: The EPA respectfully disagrees with these comments. Because all of the building 

blocks can be implemented independently, the building blocks are severable and the invalidation 

of one would not affect the legality or functionality of the others (the only exception is the 

application of building block one in isolation, as noted below). The EPA also notes that in the 

event a building block were invalidated, the rule’s emission limits would not remain fixed, but 

would rather reflect the emission reduction opportunities available from the remaining building 

blocks only. The CO2 Emission Performance Rate and Goal Computation TSD for Final Rule 

provides appropriate data and analysis to compute state goals under any combination of the 

building blocks, in the event a building block were invalidated.

The fact that the EPA has determined that the interconnected operation of all three building 

blocks constitutes the “best system of emission reduction” established by this rulemaking does 

not undermine the severability of the building blocks. Were a building block invalidated by the 
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court, the “best system” selected and promulgated in this final rule would no longer be available 

as a means of reducing emissions. However, the EPA has concluded that the resulting 

combinations of the building blocks would continue to be the “best” system out of the options 

remaining to the agency. Accordingly, although the building blocks would be most effective 

when implemented together, the building blocks are severable because each building block is a 

feasible and demonstrated means of reducing CO2 emissions from the utility power sector, and 

each can be implemented independently of the other building blocks. The only exception is 

building block 1 in isolation: in light of the “rebound effect” described in sections V.A.4.a. and 

4.d of the final rule preamble, the EPA believes that building block 1, if applied alone, would not 

constitute the BSER.

The EPA also disagrees that the invalidation of one building block would strain the flexibility 

afforded states and affected sources under the final rule. In the event one of the building blocks 

were invalidated, compliance flexibility would likely expand rather than contract given that 

strategies in the invalidated building block would likely still be available for compliance with the 

resulting standards. For these reasons, the EPA does not believe that invalidation of a piece of 

this proposal would impair the function of the program as a whole or would require a revision to 

the approach taken in this rulemaking.

Comment 3: EPA's proposed severability approach affects the achievability of BSER and is 

unworkable in practice.

Commenters said, EPA calculated each state's CO2 emission standard using all four building 

blocks, so if any one of the building blocks is struck down, EPA will have to reassess each state's 

emission standard, and this weighs against severability. 

Commenters said EPA's contention that revised state goals could be computed after the fact by 

using the Goal Computation Technical Support Document and the enormous preamble is 

unworkable. 

Commenters said, compliance strategies may be completely upset should a BB be determined 

illegal. Commenters said, consider a scenario where a state chooses to meet the obligation of all 

four BBs by transitioning from existing coal to new NGCC generation. Commenters said, should 

BB 2 be determined to be illegal but the other BBs are maintained, then the state's ability to 

comply with the existing goals is highly unlikely.

Commenters indicated that EPA should provide a clear description of how it will adjust the statespecific performance goals in the event that a building block is removed. Commenters indicated 

that without this planning, uncertainty, delayed program implementation and implementation of 

source compliance measures would result.

Response 3: While the fact that the invalidation of one building block would require new 

computations as to the uniform rates and state goals expressed in this final rule, the EPA does not 
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believe that this weighs against severability. Re-computation would be a purely technical 

exercise and the EPA has provided appropriate data and analysis to allow for the computation of 

interim and final state goals under any combination of the building blocks in the CO2 Emission 

Performance Rate and Goal Computation TSD for Final Rule. This would be a manageable 

administrative exercise that does not defeat the functionality of the building blocks or the EPA’s 

intent that the recombined building blocks would continue to represent the “best system of 

emission reduction . . . adequately demonstrated. 

In the event a building block were invalidated after the submission of state plans, the EPA would 

work with states to ensure the swift and efficient implementation of the adjusted standards of 

performance. However, the EPA does not anticipate significant disruption to state plans, as the 

emission reductions from the invalidated building block would likely still be available for 

compliance with the adjusted standards. 

Further discussion of the independent bases for each of the building blocks and their severability 

can be found in sections V.A.4, V.A.7, and VI.C.1.d of the final rule preamble.

Comment 4: Commenters were concerned that justifications based on flexibility provided by 

the incorporation of other building blocks undermine the severability of the 

components. Commenters said, each building block should be justified on the technical 

achievability, availability, and cost of the measures within that building block, not on flexibility 

provided by other building blocks to ensure each withstands judicial scrutiny.

Response 4: Although the building blocks would be most effective when implemented together, 

the EPA believes each building block is a feasible and demonstrated means of reducing CO2 

emissions from the utility power sector, and each can be implemented independently of the other 

building blocks. A discussion of the independent bases for each of the building blocks can be 

found in section V.A.4, V.A.7, and VI.C.1.d. of the final rule preamble. Moreover, the measures 

that constitute the BSER do not encompass all possible means of reducing emissions or 

complying with the standards of performance. Significant flexibility is afforded states and 

affected EGUs when seeking to comply with the standards of performance set through the 

application of the BSER; in the event one of the building blocks were invalidated, compliance 

flexibility would likely expand rather than contract given that strategies in the invalidated 

building block would likely still be available for compliance with the resulting standards.

Comment 5: Commenters stated, the EPA should clarify its intent regarding building blocks to 

be severable. Commenters notes that EPA expects that, for any particular state, even if the 

application of the measures in one building block to that state would not produce the level of 

emission reductions reflected in the EPA's quantification for that state, the state will be able to 

reasonably implement measures in other of the building blocks more stringently, so that the state 

would still be able to achieve the proposed goal. Commenters asked, does the EPA mean that an 
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emission limit will be recalculated should a building block be determined unlawful or does it 

mean an emission limit is fixed and the remaining building blocks may be used to meet the 

emission limit?

Commenters said, if any of the Building Blocks is invalid, EPA must revisit the entire structure 

of its proposal. Commenters said, at a minimum, EPA must recalculate state emission reduction 

targets, since the targets assume the validity and implementation of all four Building Blocks.

Response 5: The rule’s emission limits would not remain fixed if a building were invalidated, 

but would rather reflect the emission reduction opportunities available from the remaining 

building blocks only. The CO2 Emission Performance Rate and Goal Computation TSD for Final 

Rule provides appropriate data and analysis to compute state goals under any combination of the 

building blocks, in the event a building block were invalidated. 

Comment 6: New notice and comment will be necessary if a building block is removed.

Commenters stated, if one or more of the building blocks were determined to be invalid and EPA 

either proceeded to enforce the goals using the remaining building blocks or recalculated and 

applied new goals without going through a new notice and comment process this would be 

unlawful, arbitrary and capricious.

Response 6: The EPA does not believe re-computation of the standards of performance in the 

event a building block is invalidated would require additional opportunity for notice and 

comment. The EPA has already taken extensive comment on the operation of each of the 

building blocks individually. In addition, the proposed rule explicitly requested comment on 

systems of emission reduction employing only a subset of the building blocks included in the 

original proposal.

Comment 7: Intent to make the Building Blocks severable is sound based on court precedence. 

Commenters stated, agency intent is the touchstone as to whether a regulation or other agency 

action is severable. Commenters said, in Davis, operators of existing municipal waste combustor 

("MWC") units which had municipal solid waste ("MSW") capacities below 250 tons/day, but 

which were located at a plant with an aggregate MSW capacity above 250 tons/day, challenged 

EPA's 1995 standards under Sections 111 and 129 of the Clean Air Act. Commenters said, in its 

initial opinion, the D.C. Circuit vacated the 1995 standards in their entirety; however, on EPA's 

petition for rehearing on the remedy, the Court held that the standards would be vacated only as 

applied to small MWC units and cement kilns, leaving the performance standards and emission 

guideline for large units other than cement kilns in place. Commenters stated, the Court inquired 

whether EPA intended the regulation to be severable, and whether there was "substantial doubt" 

that EPA would have adopted the severed portion on its own. Commenters said, the Court found 
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that EPA intended the regulation to be severable, because it was "clear that the EPA would have 

adopted the standards for large MWC units even without the standards for small MWC units and 

cement kilns." Commenters said, the Court noted that "[t]he 1995 standards for large and small 

MWC units [were] not in any way "intertwined," [and that] they operate[d] entirely 

independently of one another." Id. at 1459. Commenters said, the inclusion of a severability 

clause in a regulation creates a presumption that an invalid portion is severable. 

Commenters stated, where an agency intends the provisions of a rule to be severable, 

invalidation of one provision does not warrant invalidation of the entire rule as long as the 

remaining provisions can operate sensibly without the stricken provision. 

Response 7: The EPA agrees with these comments and appreciates the commenters support. 

The comment contains useful information that we incorporate into the record of this rulemaking.

Severability is discussed in the final rule preamble in section V.A.7.

Comment 8: Intent to make the building blocks severable is sound because building blocks 

operate independently.

Commenters stated, the proposed building blocks operate independently of one another, and that 

EPA has analyzed each building block individually, providing an assessment of technical 

potential, costs, and a description of data inputs used as the basis for the computation of the 

proposed state goals. Commenters said, EPA has also explained why each of the individual 

building blocks meets the statutory factors to qualify as components of the BSER under the 

agency's first BSER approach, and why each of the building blocks can serve as the basis for 

quantifying the amounts of reduced utilization from affected EGUs under its second BSER 

approach. Commenters stated, in addition, EPA’s proposed computation methodology adds each 

of the building blocks to the formula separately, calculates the 2012 emission rate for covered 

sources, and then adjusts the formula to reflect the application of each building block. 

Commenters provided additional details on the steps EPA followed. Commenters said, the 

proposal itself provides EPA's intent that the various building blocks be severable. 

Response 8: The EPA agrees with these comments. Although the building blocks would be most 

effective when implemented together, the building blocks are severable because each building 

block is a feasible and demonstrated means of reducing CO2 emissions from the utility power 

sector, and each can be implemented independently of the other building blocks. The only 

exception is building block 1 in isolation: in light of the “rebound effect” described in sections 

V.A.4.a. and 4.d of the final rule preamble, the EPA believes that building block 1, if applied 

alone, would not constitute the BSER. Further discussion of the independent bases for each of 

the building blocks and their severability can be found in sections V.A.4, V.A.7, and VI.C.1.d of 

the final rule preamble. The CO2 Emission Performance Rate and Goal Computation TSD for 

Final Rule provides appropriate data and analysis to compute state goals under different 

combinations of the building blocks.
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Comment 9: The Clean Power Plan can operate without one or more of the Building Blocks 

Commenters said the rule can operate sensibly even with the invalidation of one or more of the 

building blocks. Each building block independently accomplishes some level of carbon dioxide 

reduction, and each can operate regardless of whether any of the others are in place. Commenters 

said, because the goal computation formula is additive, EPA can easily recalculate the state goals 

to reflect any invalidation of one or more building blocks.

Response 9: The EPA agrees with these comments. The EPA only notes that in light of the 

“rebound effect” described in sections V.A.4.a. and 4.d of the final rule preamble of the CPP, the 

EPA believes that building block 1, if applied alone, would not constitute the BSER. Further 

discussion of the independent bases for each of the building blocks and their severability can be 

found in section V.A.4, V.A.7, and VI.C.1.d. of the final rule preamble.

1.10.8 Achievability

Comment 1: Commenters stated, section 111 requires the best system of emissions reduction to 

be adequately demonstrated. Commenters said, the goals that EPA sets in the proposed rule are 

so unrealistically aggressive that no credible claim can be made that their feasibility has been 

adequately demonstrated. Commenters said, block one, heat rate improvement at coal fired 

power plants seeks a six percent improvement. Commenters said, this is based upon EPA's 

review of literature, particularly a 2009 report. Commenters said, EPA obviously has not looked 

at the real capacity of actual electric generating units to achieve these improvements, nor has it 

considered that utilities have always been obligated to both regulatory commissions and their 

shareholders to achieve any economically achievable efficiencies. Commenters said, a six 

percent goal is far too aggressive for the West Virginia fleet of plants, which is already the 

second most efficient group in the county. Commenters said, block three, renewable energy 

would requires 600 percent increase for West Virginia. Commenters said, EPA arrived at this 

goal by arbitrarily including West Virginia and a region of northeastern states and establishing 

the goal not on what is feasible for West Virginia, but instead, appointed an unrealistically 

aggressive assessment for the region. Commenters said, block four, energy efficiency, sets a goal 

of 10.7 percent for West Virginia. Commenters said, the state's current rate is 0.05 percent, 

meaning EPA expects the state to achieve a completely unrealistic 200 fold increase.

Commenters stated that BSER requires that the system of emissions reduction be demonstrated. 

Commenters said that no one has ever achieved a 30% reduction in CO2 through the means 

chosen in the Proposed Rule. Commenters said the basis upon which demonstration is claimed 

depends largely upon a handful of state programs which are either aspirational and voluntary or 

mandatory, but not yet achieved, with off ramps and safety valves keyed to cost and reliability 

that would be precluded by the Proposed Rule. Commenters said the calculation of State CO2
237

ration limits is based upon arbitrary and circular assumptions concerning the ease with which 

States may reduce demand and switch to other generation sources at a reasonable cost while 

maintaining requisite reliability.

Response 1: Based on public comments and further analysis since proposal, the EPA has revised 

the goals that comprise the EPA's determination of best system of emission reduction. These 

changes are described in section V of the preamble to the final rule. The EPA's changes and the 

supporting rationale to the proposed heat rate improvements in building block 1 are described 

section V.C of the preamble, and the EPA has included additional flexibility provisions for this 

goal in the final rule. The feasibility of the renewable energy deployment in building block 3 is 

discussed in section V.E.7 of the preamble to the final rule. Finally, the EPA is not including 

building block 4, energy efficiency, in the final rule for the reasons discussed in section V.B.3 of 

the preamble to the final rule.

Comment 2: Commenters stated, the proposed guidelines do not establish that the four Building 

Blocks achieve the proposed levels of emission reductions when taken together as an integrated 

system, and therefore EPA's proposal has not shown that EPA's BSER determination has been 

adequately demonstrated and reflects an appropriate consideration of the required statutory 

criteria. Commenters said, EPA, therefore, has not met its burden under the Act for determining 

that the combination of the four Building Blocks as BSER can achieve the proposed levels of 

emission reductions. Commenters argued that the EPA has not analyzed the operation of the 

interconnected power system when evaluating each Building Block individually, and as a result 

has overestimated the potential emissions reductions based on incorrect assumptions and 

unsupportable conclusions regarding the achievability, costs and energy impacts of each of the 

individual Building Blocks, and the EPA has not met its obligation for each individual BSER 

Building Block given the actual real-world constraints and requirements of the electric system as 

it exists:

• EPA's analysis of Building Block 1 fails to account for causes outside of the control of 

EGU operators that impact heat rates; the impact that reduced load factor caused by the 

increased use of renewables will have on heat rates; the heat rate impacts of pollution 

control technologies installed to meet other environmental regulations; and expected 

post-2012 unit closures (when assessing fleet-wide heat rate improvement potential). The 

EPA also fails to incorporate realistic cost estimates of fuel savings from heat rate 

improvements. 

• EPA's analysis of Building Block 2 fails to account for natural gas pipeline infrastructure 

constraints and other gas-electric interdependency issues; the operation of competitive 

markets and principles of security-constrained economic dispatch; and physical, 

technical, reliability and financial constraints of the gas and electric systems, among other 

technical obstacles to increasing the utilization of existing NGCC units to 70 percent. 
238

• The renewable energy component of Building Block 3 fails to account for the fact that 

many state RES policies are founded on political considerations rather than on technical 

determinations of resource potential; does not sufficiently address the technical grid 

management challenges associated with increased penetration of renewables; and fails to 

fully account for the reliability impacts that can be introduced by variable renewable 

resources. 

• EPA's analysis regarding the level of achievable end-use energy efficiency under 

Building Block 4 fails to account for funding and cost recovery constraints on utility-run 

energy efficiency programs; time constraints in implementing new energy efficiency 

programs needed to bring a state's annual incremental savings to 1.5 percent; and the 

"pinching" effect of codes and standards on achievable EE savings rates. 

Commenters stated, the Agency must demonstrate that the level of emission reductions it 

believes are achievable by the states can be achieved when its four Building Blocks operate 

concurrently as part of the interconnected power system. Commenters said, it is clear that, given 

the interconnected nature of the power system, the emission reductions EPA assumes are 

achievable by each individual Building Block might not be technically feasible given the 

complex interactions that exist between each of these Building Blocks as part of that same 

interconnected system. Commenters said, by pursuing an additive approach to calculate the 

emission reductions available from individual Building Blocks outside the context of the 

interconnected power system, EPA has not demonstrated the reductions its claims are available 

are achievable, as required by CAA section 111(a)(1).

Commenters stated, the statutory text of CAA section 111(a)(1) makes clear that EPA's 

obligations to make findings with respect to emission reductions, adequate demonstration, costs, 

nonair environmental impacts and energy requirements is an obligation to make findings with 

respect to the best system of emission reduction and not merely with respect to the emission 

limitation that, in the case of this rule, constitutes the state goals. 

Commenters stated, further, while the section 111(a) definition of "standard of performance" 

specifies that the emission limitation must be "achievable," see CAA section 111(a)(1) (defining 

standard of performance as a "standard for emissions of air pollutants which reflects the degree 

of emission limitation achievable..."), the limitation must be "achievable" by the regulated source 

"through application of" BSER. Id. Commenters said, that is, in order to set the emission 

limitation, EPA must make a finding about the achievability of that limitation specific to the 

system of emission reduction it uses to set that limitation. Commenters said, the Agency must 

show that the limitation (the state-specific emission rate goal) is achievable using the particular 

BSER measures EPA has identified when combined as an integrated system. Commenters said, 

therefore, achievability as an integrated system is an additional requirement for which the 

Agency must make an affirmative finding when broadly defining BSER on a system-wide basis. 

Commenters said, EPA must also provide the requisite analysis to support that finding.
239

Response 2: The EPA disagrees with this comment. The EPA discusses the interaction among 

the different building blocks relative to the achievability of EPA's determination of BSER in 

section V.A of the preamble to the final rule. Finally, for the reasons discussed in section V.B.3 

of the preamble to the final rule, the EPA is not finalizing the proposal to include building block 

4, demand-side energy efficiency measures, as part of the BSER.

Comment 3: Commenters indicated that rural electric cooperatives generally have limited 

generation portfolios with a heavy reliance on coal-fired EGUs, and this fact and other practical 

realities would limit the cooperatives' ability to either cost-effectively implement or technically 

achieve many of the limits in EPA's building blocks.

Response 3: We disagree with this comment. In the preamble (section V.A) and the Legal 

Memo, we describe the ways that rural co-ops can implement the building blocks.

Comment 4: EPA's BSER is unlawful and not adequately demonstrated for Texas' competitive 

intrastate electricity system. 

Commenters stated that the EPA has failed in its efforts to draft a workable and defensible rule. 

Commenters said, particularly as to Texas and Luminant's units, EPA's so-called "best system of 

emission reduction" - its 791 pounds CO2 per megawatt-hour goal for Texas - is not achievable, 

not adequately demonstrated, and does not take into account the cost, environmental impact, and 

energy requirements of reducing CO2 emissions from fossil fuel-fired EGUs, as a standard of 

performance must. 

Commenters stated that the CAA requires that a "standard of performance" reflect "the degree of 

emission limitation achievable through the application of the best system of emission reduction 

which (taking into account the cost of achieving such reduction and any nonair quality health and 

environmental impact and energy requirements) the Administrator determines has been 

adequately demonstrated." Commenters stated, under this definition, "[a]n adequately 

demonstrated system is one which has been shown to be reasonably reliable, reasonably 

efficient, and which can reasonably be expected to serve the interests of pollution control without 

becoming exorbitantly costly in an economic or environmental way." Commenters stated, 

although the EPA may "look[ ] toward what may be fairly projected for the regulated future" 

rather than be restricted to the "state of the art at present," any system proposed is "subject to the 

restraints of reasonableness and cannot be based on 'crystal ball' inquiry." Commenters argued 

that, in looking to dictate how the electricity system is operated from now until 2030, EPA has 

engaged in just such a crystal ball inquiry.

Commenters stated, in addition to the statutory and constitutional bars to incorporating building 

blocks 2, 3, and 4 as BSER, these building blocks have not been adequately demonstrated for 

Texas's competitive intrastate electricity system and are unachievable, particularly on EPA's 
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proposed timeline. Commenters stated, section 111 standards must be achievable, but EPA's 

proposal is not. 

Commenters stated, even after a system is "adequately demonstrated," it can only be applied to 

the source category to require "achievable" emission reductions. Commenters stated, "an 

achievable standard is one which is within the realm of the adequately demonstrated system's 

efficiency" and may not be "at a level that is purely theoretical or experimental." Commenters 

argued that to show that its proposed standards are "achievable," EPA is obligated to "(1) 

identify variable conditions that might contribute to the amount of expected emissions, and (2) 

establish that the test data relied on by the agency are representative of potential industry-wide 

performance, given the range of variables that affect the achievability of the standard," and the 

EPA has not done so here.

Response 4: The EPA disagrees with this comment. As described in section V.A.3 of the final 

CPP, the EPA has revised the BSER since proposal, based on public comments, to ensure that 

the EPA's determination of BSER in the final rule is adequately demonstrated. These changes 

include revising the heat rate improvement goals, including those that would affect EGUs in 

Texas. Finally, for the reasons discussed in section V.B.3 of the final rule preamble of the CPP, 

the EPA is not finalizing the proposal to include building block 4, demand-side energy efficiency 

measures, as part of the BSER.

Comment 5: Commenters argued that no state has demonstrated an ability to achieve all four of 

EPA's proposed Building Blocks. Commenters said, no state has achieved a six percent heat rate 

improvement, no state has achieved a 70 percent capacity factor for NGCC units, and while very 

few states achieved either EPA's renewable energy or energy efficiency targets in 2012, no states 

achieved this year-after-year. 

Commenters argued that the proposed guidelines do not establish that the four Building Blocks 

achieve the proposed levels of emission reductions when taken together as an integrated system, 

and, therefore, EPA's proposal has not shown that EPA's BSER determination has been 

adequately demonstrated and reflects an appropriate consideration of the required statutory 

criteria. Commenters argued that EPA, therefore, has not met its burden under the Act for 

determining that the combination of the four Building Blocks as BSER can achieve the proposed 

levels of emission reductions.

Commenters stated, the Agency must demonstrate that the level of emission reductions it 

believes is achievable by the states can be achieved when its four Building Blocks operate 

concurrently as part of the interconnected power system. Commenters said, it is clear that, given 

the interconnected nature of the power system, the emission reductions EPA assumes are 

achievable by each individual Building Block might not be technically feasible given the 

complex interactions that exist between each of these Building Blocks as part of that same 

interconnected system. Commenters said, by pursuing an additive approach to calculate the 

emission reductions available from individual Building Blocks outside the context of the 
241

interconnected power system, EPA has not demonstrated the reductions its claims are available 

are achievable, as required by CAA section 111(a)(1).

Commenters stated, the statutory text of CAA section 111 makes clear that EPA's obligations to 

make findings with respect to emission reductions, adequate demonstration, costs, non-air 

environmental impacts and energy requirements is an obligation to make findings with respect to 

the best system of emission reduction and not merely with respect to the emission limitation that, 

in the case of this rule, constitutes the state goals. See CAA section 111(a)(1).

Commenters stated, further, while the section 111(a) definition of "standard of performance" 

specifies that the emission limitation must be "achievable" (see CAA section 111(a)(1) (defining 

standard of performance as a "standard for emissions of air pollutants which reflects the degree 

of emission limitation achievable..."), the limitation must be "achievable through application of" 

BSER. Id. That is, according to the commenters, in order to set the emission limitation, EPA 

must make a finding about the achievability of that limitation specific to the system of emission 

reduction it uses to set that limitation, and the Agency must show that the limitation (the statespecific emission rate goal) is achievable using the particular BSER measures EPA has identified 

when combined as an integrated system including all of the RTO's areas of responsibility. 

Commenters said, therefore, achievability as an integrated system is an additional requirement 

for which the Agency must make an affirmative finding when broadly defining BSER on a

system-wide basis, and EPA must also provide the requisite analysis to support that finding.

Commenters stated, EPA did not fully address the achievability of the Building Blocks and state 

emission rate goals in the context of the interconnected power system. Commenters said, for 

example, EPA does not appear to have considered that decreased utilization of existing coalbased units has a detrimental effect on their heat rate, thus increasing emissions despite possible 

investments in heat rate improvements. Commenters said, similarly, EPA assumed that high 

levels of NGCC unit utilization can be achieved and maintained concurrently with increased 

deployment of renewable generation, despite the fact that gas-based generation is often required 

to cycle to support integration of variable renewable resources into the grid. Commenters said, 

these types of fundamental programmatic issues raise questions about the adequate 

demonstration of EPA's selected BSER, and the states' ability to achieve the proposed emission 

rate goals. Commenters said, accordingly, the proposed Colorado, South Dakota and Wyoming 

state goals should be adjusted based on numerous factors.

Commenters stated, however, in the very section of the proposed guidelines justifying BSER as 

the combination of the four Building Blocks, EPA primarily argues that the state goals meet the 

relevant criteria. Commenters said, in so doing, EPA relies significantly on the flexibility it has 

provided to states by imposing only an emission goal and allowing the state to tailor application 

of emission reduction measures including but not limited to those that make up BSER. 

Commenters said, state flexibility to implement the emission limitation through other means is 

important, but cannot be a shield against insufficient analysis of the proposed BSER measures 

used to set the emission goal and of the ability to meet that goal for affected units or on a 

statewide basis. Commenters said, in every section 111 rulemaking, regulated units clearly have 
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the flexibility to take measures other than the specific BSER technology EPA has determined is 

adequately demonstrated, and EPA cannot bar states from taking verifiable, demonstrable and 

innovative measures to achieve reductions. Commenters said, it is EPA's responsibility, however, 

to evaluate the proposed BSER against the statutory criteria and determine that that BSER meets 

the statutory criteria, and EPA has not done so in the proposed guidelines.

Response 5: The EPA disagrees with this comment. As described in section V.A.3 of the final 

rule preamble of the CPP, the EPA has revised the BSER since proposal, based on public 

comments, to ensure that the EPA's determination of BSER in the final rule is adequately 

demonstrated. These changes include revising the heat rate improvement goals with regional 

rates ranging from 2.1 percent to 4.3 percent (rather than 6 percent) as the average heat rate 

improvement opportunity achievable by steam units in each region under building block 1; use of 

75 percent of summer capacity (rather than 70 percent of nameplate capacity) as the target 

capacity factor for existing NGCC units under building block 2; and use of updated information 

from the National Renewable Energy Laboratory (NREL) on renewable energy costs and 

potential, and revision of the list of quantified RE technologies to exclude landfill gas under 

building block 3. Finally, for the reasons discussed in section V.B.3 of the final rule preamble of 

the CPP, the EPA is not finalizing the proposal to include building block 4, demand-side energy 

efficiency measures, as part of the BSER.

Comment 6: Commenters asserted that the proposed BSER has not been demonstrated to be 

achievable and is based on arbitrary, overly optimistic, and unfounded assumptions.

Commenters stated, EPA's proposal rests on a number of assumptions about the electric grid, the 

nation's transmission infrastructure, and the ability to transfer electrons on demand which are not 

correct. 

Commenters said, these faulty assumptions include such critical issues as limitations on source 

efficiency improvements, natural gas availability and existing natural gas generation capacity, 

shortages of transmission infrastructure for required additional renewable generation, arbitrary 

treatment of nuclear power, and the unrealistic assumptions regarding future potential reduction 

in electricity demand based on energy efficiency programs.

Commenters stated, the EPA has asserted that each of the individual building block targets 

assigned to States are based on "reasonably achievable rather than maximum performance 

levels." Commenters were concerned that, as with its proposed rule for new power plants, the 

EPA is basing enormously impactful mandates on technology assumptions that have yet to be 

demonstrated as achievable at a reasonable cost and in some cases achievable at any cost. 

Commenters said, detailed analysis must be undertaken and made available to the public.

Commenters stated, even if permissible, it is not at all clear that it is feasible for states to meet 

the proposed required emissions reductions. Commenters said, the other building blocks seem 
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equally ambitious and fraught with uncertainty. Commenters said, building block four assumes 

that states can achieve an annualized energy savings of 1.5 percent without constraining or 

stalling economic growth. Commenters said, in short the building blocks stack ambition on 

ambition and risk on risk.

Commenters stated, EPA's building block approach to setting state emission rate goals is replete 

with arbitrary, overly optimistic and unfounded assumptions. Commenters said, as a result, the 

goals for some individual states are highly discriminatory and unfair, and unachievable within 

the short time frame allowed for compliance, if they are achievable at all. Commenters said, EPA 

also failed to explain why the proposed rule is reasonable and appropriate for those states which 

may be atypical for one or more of the building block provisions, other than to assume that 

expanding one of the other building blocks would still be reasonable as compensation. 

Commenters said, EPA should base its rule on levels of performance achievable in each state, 

instead of average achievable performance (e.g., for heat rate improvement or for renewable 

energy expansion), or best practices (e.g., for end-use efficiency). 

Commenters stated, despite its admirable commitment to flexibility, the Clean Power Plan 

cannot establish emission targets for any state based on policies or programs that would be 

unachievable if they were directly enforceable. Commenters said, many aspects of the Blocks are 

not technically and economically feasible, either on an individual basis or when interactions 

among the building blocks have been adequately considered.

Commenters stated, EPA applied the four building blocks to each state's 2012 electric generation 

to determine state goals for CO2 reductions. Commenters said, EPA's methodology for applying 

the building blocks is difficult to interpret, but it is apparent that, in many instances, EPA has 

simply assumed that individual states will be able to implement the building blocks, without 

closely examining whether this is feasible in each case and this in itself is unreasonable and 

inadequate. Commenters said, EPA also claims that it is imposing "reasonable rather than the 

maximum" levels for each building block and that states can compensate for not using one 

building block by increasing the use of another. Commenters argued that because EPA's onesize-fits-all approach does not take into account the actual limitations on the states' abilities to 

implement the building blocks, this purported "flexibility" is in many cases simply nonexistent.

Commenters argued that EPA's own modeling for the proposal does not even attempt to rely on 

the four Building Blocks to assess the achievability (or cost) of compliance. Commenters said, 

for example, EPA's compliance modeling indicates that no additional renewable generation 

would be constructed in Georgia, despite EPA's assumption that Georgia could generate 10 

percent of its energy from renewable energy sources in 2030 in setting Georgia's goal. 

Commenters said, as a result, EPA's own compliance modeling methodology as well as the 

results of that modeling undercut the Agency's BSER determination.

Commenters stated, the EPA's proposed BSER and the state goals provided thereunder are based 

on faulty assumptions, or worse, indifference to known limitations, and are unevenly applied. 

Commenters said, by its decision to assign unachievable standards in South Carolina, the EPA 
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has capriciously made the state a loser in the lottery of percentage reductions. Commenters said, 

there has been no consideration given to local constraints to achieve reduction goals in South 

Carolina, and no demonstration that the building blocks can be made to work together to achieve 

the targeted reduction number. Commenters believed that the failures of the EPA proposal 

constitute an unlawful abuse of discretion. 

Commenters stated, without modeling to support its four Building Block system, EPA falls back 

on qualitative assessments of the independent feasibility of each individual Building Block and 

then simply adds together the reductions it assumes each Building Block can achieve to identify 

each state's required emission rate. Commenters said, for example, EPA simultaneously assumes 

significant reductions in electricity demand based on implementation of energy efficiency 

programs, increases in zero-carbon generation, and re-dispatch to natural gas. Commenters said, 

this simplistic approach fails to account for whether this particular mix would be possible in a 

state given localized system constraints or whether the resulting generation mix could be 

reasonably employed to meet demand. Commenters said, nor has EPA evaluated how particular 

blocks would interact; for example, EPA does not consider the impacts that substantially 

increasing renewable generation may have on the efficiency of traditional fossil fuel-fired EGUs 

as they get repurposed to fill in the load gaps when intermittent renewable generation is 

unavailable. Commenters said, EPA's failure to account for these negative interactions not only 

evidences the Agency's lack of expertise with the electricity sector but also fundamentally 

invalidates EPA's BSER determination.

Commenters stated, it appears that EPA made numerous assumptions in the proposed guidelines 

about the emission reductions achievable by each separate Building Block that are unsupported 

by evidence in the record. Commenters said, while it is EPA's role to determine BSER in 

compliance with the provisions of the CAA, ultimately it is the role of the states to determine the 

application of the BSER to specific affected units within that state. Commenters said, EPA has a 

statutory obligation to ensure that BSER is adequately demonstrated and to show that the state 

emission rate goals are achievable, particularly in light of the interconnected nature of the power 

system. Commenters said, EPA's assumptions and conclusions about the individual Building 

Blocks that EPA identified in setting BSER should be scrutinized in light of the best available 

data and experience and, adjusted as necessary. Commenters said, EPA should ensure that the 

state emission rate goals in the final rule reflect an evaluation of all BSER components together 

in order to properly reflect the interconnected nature of the power sector and appropriate 

assumptions and conclusions about the level of reductions achievable by each component.

Response 6: The EPA disagrees with this comment. As described in section V.A.3 of the final 

rule preamble of the CPP, the EPA has revised the BSER since proposal, based on public 

comments, to ensure that the EPA's determination of BSER in the final rule is adequately 

demonstrated. These changes include revising the heat rate improvement goals with regional 

rates ranging from 2.1 percent to 4.3 percent (rather than 6 percent) as the average heat rate 

improvement opportunity achievable by steam units under building block 1; use of 75 percent of 

summer capacity (rather than 70 percent of nameplate capacity) as the target capacity factor for 

existing NGCC units under building block 2; and use of updated information from the National 
245

Renewable Energy Laboratory (NREL) on renewable energy costs and potential, and revision of 

the list of quantified RE technologies to exclude landfill gas under building block 3. The final 

rule also allows affected EGUs the flexibility to employ a variety of non-BSER measures (to the 

extent permitted under a given plan), as described in section V.B.6 of the final rule preamble. 

Finally, for the reasons discussed in section V.B.3 of the final rule preamble, the EPA is not 

finalizing the proposal to include building block 4, demand-side energy efficiency measures, as 

part of the BSER.

Comment 7: Commenters stated, it is fundamental that a standard of performance under section 

111 must "reflect[] the degree of emission limitation achievable through the application of the 

best system of emission reduction which (taking into account the cost of achieving such 

reduction and any non-air quality health and environmental impact and energy requirements) the 

Administrator determines has been adequately demonstrated." Commenters said, EPA may not 

base its determination that a standard is achievable on "mere speculation or conjecture." 

Commenters said, rather, the Agency bears the burden of showing that a standard is achievable 

"for the industry as a whole" and "under the range of relevant conditions which may affect the 

emissions to be regulated," including "under most adverse conditions which can reasonably be 

expected to recur." Commenters said, in order to show that the Proposal is achievable, EPA must 

"(1) identify variable conditions that might contribute to the amount of expected emissions, and 

(2) establish that the test data relied on by the agency are representative of potential industrywide performance, given the range of variables that affect the achievability of the standard." 

Commenters stated, EPA has not done so in this rulemaking. Commenters said, rather, the 

Agency has set targets under each Building Block that far exceed what is feasible or costeffective. Commenters said, in particular, the targets under Building Blocks 1 and 2 (i.e., the 

Building Blocks that involve measures taken by affected EGUs, either individually or 

collectively across a state) are not supported by the rulemaking docket and are simply not 

achievable. Commenters said, Building Block 3 is based on unrealistic assumptions, and 

Building Block 4 gives rise to enforcement difficulties. Commenters said, as a result, compliance 

with the state goals will be extremely costly and difficult (if not impossible) for any state as a 

whole and will certainly be impossible for many individual affected EGUs to achieve.

Response 7: The EPA disagrees with this comment. As described in section V.A.3 of the final 

rule preamble of the CPP, the EPA has revised the BSER since proposal, based on public 

comments, to ensure that the EPA's determination of BSER in the final rule is adequately 

demonstrated. These changes include revising the heat rate improvement goals with regional 

rates ranging from 2.1 percent to 4.3 percent (rather than 6 percent) as the average heat rate 

improvement opportunity achievable by steam units under building block 1; use of 75 percent of 

summer capacity (rather than 70 percent of nameplate capacity) as the target capacity factor for 

existing NGCC units under building block 2; and use of updated information from the National 

Renewable Energy Laboratory (NREL) on renewable energy costs and potential, and revision of 

the list of quantified RE technologies to exclude landfill gas under building block 3. Finally, for 
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the reasons discussed in section V.B.3 of the final rule preamble, the EPA is not finalizing the 

proposal to include building block 4, demand-side energy efficiency measures, as part of the 

BSER.

Comment 8: Commenters stated, there are significant policy and technical impediments that 

make implementation of this proposal impractical and likely impossible. Commenters said, 

starting with the exclusive role of the Federal Energy Regulatory Commission (FERC) in 

determining how energy is dispatched, the proposed rule impermissibly requires States to 

regulate dispatch in contravention of FERC authority. Commenters said, next is the inability of 

the States to regulate based upon environmental rather than economic dispatch when such 

decisions are controlled by regional transmission organizations and independent system 

operators whose boundaries are not contiguous with state borders. Commenters further said, 

there is the potential impact of the rule on the reliability of the supply of electricity.

Response 8: We disagree with commenters. The final rule does not require states to regulate 

dispatch in wholesale electricity markets. Our emission guidelines simply reflect an achievable 

emissions limit through the application of the BSER and do not in themselves require states or 

sources to implement the BSER. Moreover, these emission guidelines provide states with the 

flexibility to establish, implement, and enforce standards of performance and do not intrude on 

the regulatory domain of FERC or the states. For a comprehensive discussion of this issue, 

please see section V.A.2 of the final rule preamble of the CPP. Additionally, the EPA carefully 

considered reliability in drafting this final rule. For a discussion of reliability issues, please see 

preamble section VIII.G.2. Finally, we disagree with commenters that the final rule requires 

environmental dispatch. Instead, the potential to shift generation identified in building block 2 is 

entirely consistent with the existing economic dispatch protocols. Environmental policies can 

shift generation in two ways. The first is operational restrictions, such as permit limits on the 

number of hours that an EGU can operate in order to limit emissions. The second is changes in 

the relative costs of generation among different types of affected EGUs related to pollution 

reduction measures. For example, a regulation that necessitates the use of a control technology 

that requires the application of a reagent in a certain kind of EGU will increase the variable cost 

of operating that plant, which in turn may reduce the amount of generation it is called upon to 

deliver to the grid through security-constrained economic dispatch procedures. This is consistent 

with economic dispatch.

Comment 9: Commenters stated the NPRM would impose unachievable standards contrary to 

the plain language of section 111, which requires the degree of emission limitation to be 

"achievable." Commenters said the EPA's approach to nuclear units which are under construction 

would eliminate any meaningful margin for compliance purposes, substantially hindering the 

opportunity for these states to achieve compliance with the EPA's standards. Commenters stated 

the EPA's claim that the rule provides "flexibility" is incorrect. Commenters said in reality, 
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Georgia, South Carolina, and Tennessee - subject to 111(d) existing source emission rates that 

would be close to or more stringent than the 111(b) new source rates - will face a substantial 

Clean Air Act compliance risk, with no real flexibility, as a result of their more stringent state 

goals. Commenters stated CRS explained: "If these anticipated units do not complete 

construction and enter service, these states would likely have more difficulty achieving their 

emission rate goals." Commenters said in the Interagency Review process, OMB explained to the 

EPA: "As these new units do come on-line, the inclusion of all generation from these units in the 

state goal is problematic as any prolonged outage would almost guarantee that any state relying 

on carbon-free nuclear generation to meet its annual carbon goal would fail to meet that goal." 

Commenters stated GEPD was more direct in their comments, explaining that "underconstruction nuclear generation has such a significant impact on the goal that any shortfall in 

ultimate performance would be virtually impossible to overcome." Commenters said states and 

utilities should not be forced by the EPA to make decisions about operating multi-billion dollar 

nuclear reactors on the basis of achieving compliance with the Clean Air Act. Commenters stated 

similarly, neither the relevant state agencies in Georgia, South Carolina or Tennessee nor the 

EPA has the authority to require the construction or operation of these units or to enforce any 

decision to build these units. Commenters stated yet, their respective states cannot reasonably be 

expected to meet the stringent goals that EPA has proposed without the construction and 

virtually continuous operation of these units.

Response 9: As described in section V.A.3. of the final rule preamble of the CPP, the EPA is not 

finalizing increased generation from new nuclear capacity as a component of the BSER.

Comment 10: Commenters stated the BSER in the proposed rule is not feasible and therefore 

cannot achieve the designated standard. 

Commenters quoted, "EPA does have authority to hold the industry to a standard of improved 

design and operational advances, so long as there is substantial evidence that such improvements 

are feasible and will produce the improved performance necessary to meet the standard." Sierra 

Club v. Costle, 657 F.2d, 298, 364 (D.C. Cir. 1981).

Commenters stated, EPA's proposed best system of emission reduction simply does not meet this 

standard. Commenters said, the agency has used national aggregated data for each BSER (four 

building blocks), which it applies to each state' energy fleet to determine that state's goal. 

Commenters said, because this national data represents EPA's analysis of 48 states total, and not 

any one individual state, EPA is skewing each state goal to the point where it is in no way a 

reflection of a goal that state can meet. Commenters said, thus, EPA has not provided substantial 

evidence to show that the BSER will produce the performance necessary to meet the standard, 

nor that the BSER is reasonably reliable, efficient, or cost-effective, as required by the D.C. 

Circuit.
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Commenters added, in fact, in the Modified and Reconstructed Source Rule, the EPA 

acknowledges that the most efficient generation technology available is a SCPC boiler and the 

EPA proposes it as BSER for large reconstructed sources. Commenters said, yet, in this proposed 

rule, a rule that was intended to establish "the degree of emission limitation achievable," which 

has been adequately demonstrated, EPA does not propose to let states choose a technology-based 

standard such as this for BSER.

Response 10: We disagree with this comment. The EPA's determination of the BSER and the 

changes since proposal with respect to the use of aggregated data are discussed in sections V.E 

and VI.D of the final rule preamble of the CPP. The comment comparing the proposed BSER to 

the BSER for large reconstructed sources is addressed in section V.B.7 of the final rule 

preamble.

Comment 11: The proposed standard is not achievable because it is purely theoretical and 

arbitrary. 

Commenters stated, "an achievable standard is one which is within the realm of the adequately 

demonstrated system's efficiency and which, while not at a level that is purely theoretical or 

experimental, need not necessarily be routinely achieved within the industry prior to its 

adoption." Essex Chem. Corp., 486 F.2d at 433-34.

Commenters stated, in composing each state's emission guideline, or standard of performance, 

EPA has used national aggregated data for each BSER building block, which it applies to each 

state's energy fleet to determine that state's goal. Commenters said, because this national data 

represents EPA's analysis of 48 states total, and not any one individual state, EPA is skewing 

each state goal to the point where it is in no way a reflection of that state's ability to meet it. 

Commenters said, these state standards are not at all a reflection of real-world conditions in a 

given state, but are merely an amalgam of national projections applied to that state's energy fleet. 

Commenters said, thus, EPA's standard is purely theoretical.

Commenters stated, in North Carolina v. EPA, the D.C. Circuit in striking down EPA's Clean Air 

Interstate rule ("CAIR"), noted that it is "entirely arbitrary" to base standards on "irrelevant 

factors." North Carolina v. EPA, 531 F.3d 896, 930 (D.C. Cir. 2008). Commenters argued that in 

the proposed rule, two of the four building blocks (building blocks 3 and 4) simply do not emit 

CO2, and thus the EPA's contention that, under Section 111, these other units are somehow 

relevant to the regulation of emissions from fossil fuel EGUs further supports the EPA's fiction 

that it is establishing an ESPS. Commenters said, EPA argues that these building blocks 

"displace or avoid the need for generation from those sources and thereby reduce the emissions 

from those sources." Legal Memorandum for Proposed Carbon Pollution Emission Guidelines 

for Existing Electric Utility Generating Units ("Legal Memorandum or "Mem."). Commenters 

said, by this logic, EPA could include any number of things under this rule, including electric 

vehicles, global GHG emissions and geo-politics, all of which also have the ability to "avoid the 
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need for generation from those sources and thereby reduce emissions from those sources." 

Commenters said, as the court in North Carolina noted, "lest EPA forgot, it is 'a creature of 

statute' and has only those authorities conferred upon it by Congress." North Carolina, 531 F.3d 

at 44. 

Response 11: We disagree. As we explain in the preamble, an emission guideline simply 

identifies an achievable emission limit for affected sources based on application of the BSER; it 

does not require sources to implement the BSER and encourages sources to take advantage of 

compliance alternatives, such as demand-side energy efficiency, where appropriate. For reasons 

discussed in section V of the final rule preamble of the CPP, our interpretation does not extend 

beyond the relevant factors of the statute and would only impose requirements on affected 

EGUs. 

Comment 12: Commenters stated the proposed standard is not achievable because it is not 

representative of the industry as a whole. 

Commenters stated, in determining the achievability of a standard, EPA must "consider the 

representativeness for the industry as a whole of the tested plants on which it relies, at least 

where [EPA's] central argument is that the standard is achievable because it has been achieved 

(at the tested plants)." Nat'l Lime Ass'n v. EPA, 627 F.2d 416, 431 n.46, 433 (D.C. Cir. 1980). 

Commenters said, more specifically, in order to show that a standard is achievable by a system of 

emission reduction, EPA must "(1) identify variable conditions that might contribute to the 

amount of expected emissions, and (2) establish that the test data relied on by the agency are 

representative of potential industry-wide performance, given the range of variables that affect the 

achievability of the standard." Costle, 657 F.2d 298 at 377.

Commenters stated, EPA has dismissed the requirement that its standard must be representative 

of the industry as a whole by proposing a standard that is simply not representative of industry 

entities. Commenters said, EPA knows that states will have difficulty meeting the emission 

guidelines without employing building blocks 3 and 4, and EPA concedes this point by 

calculating different, less stringent goals when relying only on Building Blocks 1 and 2 as 

BSER. Goal Computation TSD, EPA, App. 4, (June 2014) (calculating Blocks 1 & 2 only state 

goals before entering nuclear, renewable, and EE into the denominator). Commenters stated that 

EPA, in proposing a guideline that bases its stringency on beyond-the-unit measures, has created 

a standard plainly unrepresentative of the industry as a whole.

Commenters stated, courts have dismissed test data, and whole standards, for not being 

representative of the industry as a whole. Commenters said, in National Lime, the court 

remanded a NSPS for lime manufacturing because the data were not representative of the 

industry as a whole. Nat'l Lime Ass'n v. EPA, 627 F.2d at 416. Commenters said, similarly, in 

Portland Cement Assn' v. EPA, the court threw out an agency NESHAP because of insufficient 

data. Portland Cement Ass'n v. EPA, 486 F.2d. 396, 402 (D.C. Cir. 2011). Commenters said, 
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similarly, in this proposed rule, EPA has relied upon data that are not only unrepresentative of 

the industry as a whole, but nonsensical as applied to the states where the standards are to be 

met. Commenters said, moreover, EPA has made no attempt to determine the cost-effectiveness 

of such measures, nor whether such activities consider the remaining useful life of the assets as 

required by Section 111(d).

Commenters stated, unlike previous rulemakings, EPA has not devised a rule that impacts a 

single "source category." Commenters said, rather, by including building blocks 2, 3 and 4, it has 

constructed a rule that impacts four categories, not all of which "emit": (1) fossil fuel-fired 

EGUs, (2) natural gas combined cycle plants, (3) some renewable and nuclear energy resources 

and (4) demand-side energy efficiency. Commenters said, therefore, the proposed standard has to 

be representative of each of these categories because each of them will be potentially 

accountable for achieving it.

Commenters stated, EPA claims that each of its building block assumptions are achievable 

because they have already been implemented in many places, but the data it relies upon are not 

representative of the industry as a whole. Commenters said, moreover, EPA's limitations on 

when a state can be credited for the reductions associated with the building blocks raises 

significant questions about the viability of the building blocks nationally.

Commenters argued that the agency's data, and resulting assumptions, are not reflective of realworld technological or market realities, and therefore are not representative of each category as a 

whole. Commenters said, the Building Block 1 data do not catalogue actual improvements 

undertaken at plants. Commenters said, further, the agency's Building Block 2 data do not 

account for existing technology or permit conditions which preclude the ramping up of NGCC 

optimization by almost double. Commenters said, nor do they account for transmission 

restrictions or inadequate pipeline capacity. Commenters said, additionally, the agency's 

Building Block 3 data selectively choose certain RE, and exclude others, while only accounting 

for theoretical "at-risk" nuclear rather than real "at-risk" nuclear. Commenters said, finally, the 

agency's Building Block 4 data do not reflect reductions achieved as a result of existing 

programs and rely predominantly on theoretical efficiency improvements and other flawed 

assumptions (e.g., using gross rather than net data). Commenters said, for these reasons, the data 

that underlie the standard (i.e., state emission guidelines) are not representative of the whole of 

each of the four categories.

Commenters stated, similarly, with respect to EPA's Building Block 2 assumption that NGCCs 

can operate at a 70% utilization rate, the agency cites no data to show how an industry that 

operated at a 46% utilization rate in 2012 (26% in Illinois) can overcome permitting and design 

restrictions to achieve such a rate. Commenters said, EPA states that a "substantial number of 

existing NGCC units have proven the ability to sustain 70% utilization rates for extended periods 

of time." 79 Fed. Reg. at 34,863. Commenters said, that fact may be true, but it does not mean 

that NGCCs, many of which are located in densely populated areas and are only permitted to 

operate at such a high level during periods of peak demand, can overcome such permitting 

restrictions based on safety and reliability concerns to actually achieve the goal. Commenters 
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said, in addition to permitting issues NGCCs need fuel, water and transmission capacity to be 

able to operate at a 70% utilization rate and any one of these items can prevent operation at a 

higher capacity factor. Commenters said, thus, this assumption is also not based on data 

representative of the industry as a whole.

Commenters stated, regarding Building Block 3, EPA relies upon the EIA Annual Energy 

Outlook, which projected a 5.7 GW (5.8%) capacity reduction to the nuclear fleet. Id. at 34,871. 

Commenters said, this projected reduction is not tied to the projected retirement of any specific 

unit, but rather in recognition of the "continued economic challenges" faced by the higher-cost 

nuclear units." Id. Commenters said, EPA accepts this esoteric national projection and applies 

this 5.8% reduction to every state goal. Commenters said, the agency does not attempt to seek a 

retention figure reflective of actual projected retirements in each state as opposed to one serving 

as a mere representation of an economic downturn. Commenters said, thus, the data the agency 

relies upon in its projection are not representative of the whole nuclear industry.

Commenters stated, while they encourage RE development, EPA's regional approach to RE 

quantification is inefficient and misguided. Commenters said, in the calculation, EPA first 

divided the country into six regions (based on NERC regions). Commenters said, second, an RE 

generation target was calculated for each region based upon averaging all 2020 RPS 

requirements in that region. Commenters said, third, an annual growth factor was calculated that 

would allow the region as a whole to reach the regional RE target in 2029 assuming that RE 

generation would increase from 2012 levels beginning in 2017. Commenters said, fourth, the 

annual growth factor for a given region was applied to individual states' 2012 RE generation to 

calculate future RE generation in that state from 2017 through 2029, not to exceed a maximum 

RE generation level equivalent to the regional RE target. Commenters said, finally, these annual 

RE generation levels for each state were used to calculate interim and final RE targets for the 

state.

Commenters stated, EPA claims that "states within each region exhibit similar profiles of RE 

potential or have similar levels of renewable resources." GHG Abatement Measures TSD, Page 

4-12. Commenters said, however, this assumption is not representative because the regions are 

large and encompass states with drastically different renewable resources. Commenters said, 

given the sizeable areas spanned by the six EPA regions, there are clearly differing levels of 

renewable energy resource adequacy and availability across these proposed regions. Commenters 

said, additionally, the EPA assumption that existing RPS targets are feasible across all states 

within a defined region does not adequately consider differing RPS requirements, including the 

varying definitions of "renewable" across the states. Commenters said, EPA did not properly 

consider the significant pre-2020 investments in RE that some states have made. Commenters 

said, further, renewable resources physically located in one state are often used to satisfy RPS 

requirements in other states. Commenters said, since these benefits are not allocated to the 

buyer's state under the proposal, RPS quantification is not representative for determining RE 

potential.
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Commenters stated, finally, with the Building Block 4, the Agency requires each state to achieve 

a goal of 1.5% savings in electricity generation achieved through demand-side energy efficiency 

programs. Id. At 34,872. Commenters said, the arguments above are applicable here because the 

rate is not achievable. Commenters said, by not accounting for future emission reductions 

achieved via existing state programs, EPA is not only punishing states for being good actors, but 

misrepresenting its data source as being representative of the industry as a whole.

Response 12: The EPA disagrees with this comment. As described in section V.A.3 of the final 

rule preamble of the CPP, the EPA has revised the BSER since proposal, based on public 

comments, to ensure that the EPA's determination of BSER in the final rule is adequately 

demonstrated. These changes include revising the heat rate improvement goals with regional 

rates ranging from 2.1 percent to 4.3 percent (rather than 6 percent) as the average heat rate 

improvement opportunity achievable by steam units under building block 1; use of 75 percent of 

summer capacity (rather than 70 percent of nameplate capacity) as the target capacity factor for 

existing NGCC units under building block 2; and use of updated information from the National 

Renewable Energy Laboratory (NREL) on renewable energy costs and potential, and revision of 

the list of quantified RE technologies. Finally, for the reasons discussed in section V.B.3 of the 

final rule preamble, the EPA is not finalizing the proposal to include building block 4, demandside energy efficiency measures, as part of the BSER. 

Comment 13: Proposed individual goals are not feasible or reasonable 

Commenters noted that EPA believes the final goal for Ohio, comprised from the individual 

goals from the four building blocks, is set at a "reasonable level ... rather than the maximum 

possible level" and states will be able to reasonably implement measures, but if a state falls short 

for one building block, it is assumed they could implement another building block more 

stringently. Commenters further noted that EPA repeatedly referred to the "flexibility" afforded 

to states to implement some or all of the assumed portions of the four building blocks or to 

implement other measures not included in the building blocks. Commenters stated EPA noted 

several "distinct" types of flexibilities being afforded to the states: (1) choices as to measures 

employed, including the timing; (2) the "core flexibility" provided under section 111(d) that 

while a state is required to establish standards of performance that reflect the degree of emission 

limitation from the control measures used to establish BSER, they need not mandate the 

particular control measures that EPA identifies as the basis for its BSER; (3) "targeted 

reasonably achievable rather than maximum performance" goals; (4) flexibility in timing that can 

help states address concerns about stranded assets and enabling states to defer imposition of 

requirements on EGUs that may be scheduled to retire after 2020 but before 2029; (5) the ability 

to translate rate to mass; and (6) the opportunity to do multi-state plans. 

Commenters firmly believed this "flexibility" is strained under this proposal. Commenters 

believed EPA has established the goals based on fundamental errors and flawed assumptions in 

each of the building blocks. Commenters stated it may be possible for a particular state to find all 
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of the building blocks feasible, some building blocks feasible, or no building blocks feasible. 

Commenters indicated that can only be understood by each individual state based on an analysis 

of technical feasibility, cost-effectiveness, legal authority, life of the unit, and numerous other 

factors. Commenters argued that EPA's analysis does not evaluate feasibility and reasonableness 

at the state level as section 111(d) affords states the ability to do when setting their standards of 

performance based upon EPA emission guidelines. With respect to Ohio, commenters disagreed 

these individual goals are feasible or reasonable at the levels that EPA has identified.

Commenters stated there is no flexibility if a state, like Ohio, cannot achieve any of the 

individual goals and finds, as EPA did, that other non-BSER options are infeasible and/or 

provide little reduction at a given cost. Commenters also noted that, if EPA erred in one building 

block and the individual goal for that building block is not feasible, it does not warrant an 

increase to what was determined the "best system of emission reduction" from another building 

block.

Response 13: The EPA disagrees with this comment. As described in section V.A.3 of the final 

rule preamble of the CPP, the EPA has revised the BSER since proposal, based on public 

comments, to ensure that the EPA's determination of BSER in the final rule is adequately 

demonstrated. These changes include revising the heat rate improvement goals with regional 

rates ranging from 2.1 percent to 4.3 percent (rather than 6 percent) as the average heat rate 

improvement opportunity achievable by steam units under building block 1; use of 75 percent of 

summer capacity (rather than 70 percent of nameplate capacity) as the target capacity factor for 

existing NGCC units under building block 2; and use of updated information from the National 

Renewable Energy Laboratory (NREL) on renewable energy costs and potential, and revision of 

the list of quantified RE technologies. Finally, for the reasons discussed in section V.B.3 of the 

final rule preamble, the EPA is not finalizing the proposal to include building block 4, demandside energy efficiency measures, as part of the BSER.

Comment 14: States have demonstrated that substantial carbon emission reductions are 

achievable. 

Commenters stated, many of their states have already made substantial commitments to achieve 

deep reductions in carbon emissions, from the power sector and economy-wide. Commenters 

said, the long-term greenhouse gas emissions reduction targets set by states in their clean energy 

and climate action plans or established by their state legislatures reflect the level of ambition that 

is achievable. Commenters said, for example, their state greenhouse gas reduction commitments 

include the following:

• California: 80 percent below 1990 levels by 2050 

• Connecticut: 80 percent below 2001 levels by 2050 

• Maine: 75-80 percent below 2003 levels long term ("may be required")
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• Massachusetts: 80 percent below 1990 levels by 2050 

• Minnesota: 80 percent below 2005 levels by 2050 

• New Hampshire: 80 percent below 1990 levels by 2050 

• Oregon: 75 percent below 1990 levels by 2050

• Vermont: 75 percent below 1990 levels by 2050 ("if practicable")

Commenters stated, the electric power sector is responsible for about one-third of national 

greenhouse gas emissions and approximately 40 percent of CO2 emissions, making it the single 

largest sector for emissions in the United States. Commenters said, moreover, the fact that these 

emissions are produced by a small number of sources relative to other sectors (e.g., 

transportation), and that there are a large number of cost-effective opportunities to reduce 

emissions, means that it is critical that we achieve significant reductions from the power sector in 

order to address the challenge of climate change.

Response 14: We agree with this comment. However, as described in section V.A.3 of the final 

rule preamble of the CPP, the EPA has revised the BSER since proposal, based on public 

comments, to ensure that the EPA's determination of BSER in the final rule is adequately 

demonstrated.

Comment 15: State Experience Confirms that this Overall Level of Implementation is 

Achievable 

Commenters stated, their state experience also confirms that the overall, national level of 

reduction expected from EPA's proposed emission guideline is achievable, as many of their 

states have cost-effectively achieved even greater reductions on a shorter timeframe.

Commenters noted, EPA projects that the proposed emission guideline will achieve a 22 percent 

reduction over a 19-year period (2012-2030). Commenters stated, as described above, many of 

their states have already achieved reductions of this magnitude in a shorter time frame and, on 

average, their states have reduced carbon pollution from the power sector by 23 percent in the 

eight-year period between 2005 and 2012. Commenters stated that the nine states participating in 

the Regional Greenhouse Gas Initiative have together reduced carbon pollution in the region by 

over 40 percent from 2005 to 2012. 

Commenters stated, in short, the collective experience of their states demonstrates that the 

system identified by EPA is already being successfully implemented to achieve emission 

reductions of a similar magnitude, in a shorter timeframe, than the overall reductions proposed 

by EPA, and a number of are states have achieved significantly greater reductions.
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Response 15: We agree with this comment. However, as described in section V.A.3 of the final 

rule preamble of the CPP, the EPA has revised the BSER since proposal, based on public 

comments, to ensure that the EPA's determination of BSER in the final rule is adequately 

demonstrated.

Comment 16: States have Demonstrated Various Programs that are Achieving Meaningful CO2

Emission Reductions in the Power Sector along with Other Significant Benefits 

Commenters stated, their states - along with others - have developed a variety of state programs 

that achieve substantial, cost-effective carbon emission reductions and improvements in net 

carbon emission rates. Commenters stated, through market-based programs, renewable portfolio 

standards, energy efficiency resource standards and funding commitments, utility planning, and 

other efforts, their states have reduced carbon pollution from the electricity sector by 20 percent 

from 2005 to 2011, and similarly improved their net carbon emission rate 19 percent over the 

same time period, from 941 to 759 pounds CO2 per megawatt hour of electricity produced (lbs 

CO2/MWh). Commenters stated that these programs are also delivering numerous additional 

benefits, including reductions of conventional pollutants and the significant public health 

benefits that accompany those reductions.

Commenters stated, their state programs have been developed through substantial democratic 

processes, and reflect the different on-the-ground experience of their states, including differences 

in the structure of energy markets and market participants. Commenters said, taken together, 

these approaches are driving improvements and innovation throughout the electricity system, 

leading to a cleaner and more efficient system overall.

Commenters provided a chart on page 51 of their written comments entitled "Percent Change in 

Electricity Sector Carbon Dioxide Emissions, from a 2000 Baseline" showing the decline in CO2

emissions for the electricity sector from 2001 to 2011 for ten states.

Commenters also provided a chart on page 51 of their written comments entitled "Percent 

Change in the Carbon Dioxide Emissions Rate (lbs CO2/ MWh), from a 2000 Baseline, Including 

All Electricity Resources" showing the decline in CO2 emissions rate for the electricity sector 

from 2001 to 2011 for fourteen states.

Response 16: We agree with this comment. However, as described in section V.A.3 of the 

preamble to the final rule, the EPA has revised the BSER since proposal, based on public 

comments, to ensure that the EPA's determination of BSER in the final rule is adequately 

demonstrated.

Comment 17: Commenters stated, the four building blocks represent measures already being 

implemented by industry and states. 
256

Commenters stated, EPA appropriately defines BSER to reflect the system of emission 

reductions that the electric sector is already implementing. Commenters supported a program 

that achieves meaningful emission reductions and that is based on measures beyond those that 

can be taken at existing affected units. Commenters said, EPA appropriately recognizes the 

interconnected nature of the electric grid in defining BSER in the proposed rule and identifies 

BSER in a way that reflects the fact that fossil emissions can be reduced both through changes in 

the operation of fossil-fuel power plants as well as through the displacement of higher emitting 

resources with lower- and zero-emitting generation and energy efficiency measures. Commenters

said, EPA's approach to BSER reflects the essence of the way the electric industry operates and 

is fully consistent with successful practices. Commenters said, the proposed building blocks 

capture electric system strategies that are already being deployed to lower GHG emissions across 

the electric system.

Commenters stated, the case law supports EPA's approach in examining the cost of compliance. 

Commenters said, under Essex Chemical Corp. v. Ruckelshaus, EPA must consider the 

economic cost associated with achieving the reductions as well as the cost to the environment if 

the reductions are not achieved. Commenters said, in the proposed rule, EPA considers costs for 

each building block, and in their experience, EPA is capturing measures such as renewables and 

energy efficiency that they are already implementing because they are cost-effective and provide 

value to their customers.

Response 17: We agree with this comment. However, as described in section V.A.3 of the 

preamble to the final rule, the EPA has revised the BSER since proposal, based on public 

comments, to ensure that the EPA's determination of BSER in the final rule is adequately 

demonstrated.

1.10.9 BSER based on emissions trading

Comment 1: The proposal is consistent with past rules that use emissions trading in BSER.

Commenters stated, mass-based allowance trading mechanisms for compliance are contemplated 

by the Clean Air Act and the Agency's longstanding section 111(d) rules. Commenters said, 40 

CFR Section 60.24(b)(1) explains that approvable state plans may incorporate emissions 

standards in the form of either an allowance system, or allowable rates, and that section 60.21(f) 

still references an “allowance system.” 

Commenters stated, EPA recognized that under a section 110 SIP, allowance trading 

mechanisms had been used successfully in the electric generating sector.

Commenters stated, EPA has already interpreted the phrase "standard of performance" to include 

trading programs in two recent Section 111(d) rulemakings. Commenters said, in its Clean Air 
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Mercury Rule ("CAMR"), EPA enacted a cap-and-trade system for power plants under Section 

111(d). Commenters stated, though later struck down by the D.C. Circuit on unrelated grounds, 

the CAMR rulemaking explained that a tradable permit program fit within "a careful reading of 

the section 111(a) definition [of] standard of performance," finding support in both the statutory 

text and the legislative history of the 1977 Clean Air Act Amendments. Commenters stated, in 

determining that a cap-and-trade program could be considered the BSER, EPA concluded that it 

was the best system "in the relevant timeframe." Commenters said, similarly, the emissions 

reductions strategies EPA has identified for existing power plants to cut CO2-including supply 

side energy efficiency, fuel switching, co-firing with cleaner fuels, shifting dispatch to loweremitting facilities, and demand side energy efficiency-are all available "in the relevant 

timeframe." Commenters said EPA's justifications for a power plant trading program in CAMR 

are equally valid here, especially given that CO2 emissions from power plants do not pose the 

"hot spot" concerns associated with power plant emissions of mercury.

Commenters said, prior to CAMR, EPA authorized a trading scheme under Section 111(d) for 

emissions of nitrogen oxides from large municipal waste combustors. Commenters said, the 

MWC program gave states the option of allowing credit trading among plants. Commenters said, 

EPA used average plant-wide emissions to effectively regulate NOx emissions from MWCs. 

Commenters stated, EPA allowed each state to choose whether to fulfill its section 111(d) 

obligations by participating in a cap-and-trade program or selecting some other means to stay 

within its statewide emissions budget. In CAMR, EPA let each state choose an allocation method 

and choose whether to set aside allowances to account for new units. Commenters said, 

similarly, the Proposed Rule should allow states to have the option of including all power plants, 

including those that may come on-line after a state plan is approved, within a trading plan for 

CO2 emissions.

Commenters said the only Congressional effort to date that exclusively addresses power plant 

emissions reductions is the Title IV Acid Rain Program, which is a mass-based allowance 

trading system covering the sector. Commenters said, the Acid Rain Program provides evidence 

that Congress clearly intended emissions reductions from existing (and new) power plants could 

be achieved using a mass-based allowance trading system, and that measures such as energy 

conservation and efficiency improvements could be used to achieve such reductions.

Response 1: We appreciate the commenters’ support and agree with many of the comments. See 

the following sections of the final rule preamble of the CPP for additional information related to 

these comments: EPA discusses emissions trading in the context of BSER in sections III.B, 

V.A.2. and V.B.3 of the final rule preamble of the CPP; the EPA discusses the legal basis for 

emissions trading in state plans in preamble section VIII.C.6 of the final rule preamble. EPA 

references and summarizes major Clean Air Act regulations with trading programs for power 

plants in sections V.B.3 and II.E of the final rule preamble.
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Comment 2: Commenters argued that the EPA should definitively interpret Section 111(d) to 

allow states to utilize a greenhouse gas market reduction strategy that allows greenhouse gas 

reductions to come from any source. Commenters noted that states, such as California and the 

Northeastern RGGI states, have already implemented programs allowing for GHG reductions 

from sources such as verified GHG offsets or other industries (such as the petroleum industry). 

For this reason, commenters recommended the EPA clarify that states could choose to keep or 

utilize such reductions and be compliant with the BSER rulemaking. Commenters noted that in 

Union Electric Co. v. EPA, 427 U.S. 246, 96 S.Ct. 2518, 49 L/Ed/ 2d 474 (1976), the Supreme 

Court upheld the EPA's position that if a state proposes a strategy that is effective in meeting the 

ambient air quality standards, the EPA must approve that State Implementation Plan. 

Commenters said this follows statutory language in Section 110(a) and also supports the 

cooperative federalism at the heart of the CAA. Commenters stated, Section 111(d) of the CAA 

states that the procedure governing approval of state systems of emission reduction for existing 

sources should be a "procedure similar to that provided by section 7410 [Section 110]." 

Commenters argued that if the EPA is not willing to grant the same sort of flexibility to the states 

under this section that it does under section 110, then the EPA is ignoring the reference to section 

110 out of the statute, which was not the intent of the drafters.

Response 2: We disagree with these comments. As explained in the final rule preamble 

(especially Section V.B.3(c)), the EPA interprets section 111 as imposing the constraint that the 

BSER must be based on achieving the requisite emission reductions from the affected sources.

Similarly, we interpret section 111 as requiring state plans that will have the effect of reducing 

emissons from the affected source category. Accordingly, actions taken by affected sources (or 

other entities) that do not result in emission reductions from the affected source category (e.g, 

“out-of-sector” carbon offsets) can not qualify for inclusion in the BSER and can not be used to 

determine whether a state is meeting its goal. But see the discussion in final rule preamble 

section VIII.J. regarding state coverage of new sources in a state mass-based plan to guard 

against leakage and sections VIII.J.2 and VIII.J.3 regarding emissions budget trading programs 

with broader source coverage and flexible features such as RGGI. 

These emission guidelines provide states with significant flexibility in designing section 111(d) 

plans, particularly the ability to follow a state measures approach. California and RGGI states 

have indicated that they intend to maintain their current state programs, which this rule would 

allow. Nonetheless, the EPA has the obligation to ensure that state plans comply with the 

requirements of section 111 of the Clean Air Act. 

While the EPA agrees that the CAA establishes a framework for state-federal partnership based 

on cooperative federalism, the EPA does not agree with the commenters’ characterization of that 

relationship. Please see the discussion in section 1.2 of this response to comment document. See

also, “State Implementation Plans: Response to Petition for Rulemaking; Restatement and 

Update of EPA’s SSM Policy Applicable to SIPs; Findings of Substantial Inadequacy; and SIP 

Calls To Amend Provisions Applying to Excess Emissions During Periods of Startup, Shutdown 

and Malfunction; Final Rule,” 80 Fed. Reg. 33840, 33876-79 (June 12, 2015). Additionally, the 

commenter ignores the differences between the goals and approaches of sections 110 and 111. 
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Comment 3: EPA should define "Best System" as an efficient market, and set budgets 

accordingly.

Commenters stated, EPA could further improve the rule by defining the "best system of emission 

reduction" as an efficient trading program, and set state budgets accordingly. Commenters said, a 

properly calibrated emissions cap could maximize net benefits by equalizing marginal costs with 

marginal benefits. Commenters said, EPA could fine-tune its four "building blocks" by 

equalizing marginal abatement costs across the building blocks and by calculating states' 

renewable energy targets according to the "best" use of renewables (not just the regionally 

average use of renewables). Commenters said, states would still be free to achieve those targets 

however they see fit, though EPA should offer states more guidance and encouragement on how 

to implement a flexible, market-based scheme.

Commenters stated, key terms in the statute's description of "standard of performance," "best," 

"system," "degree," "achievable," "adequately demonstrated," "taking into account the cost," and 

"energy requirements" are undefined but broad. Commenters said, given recent Supreme Court 

decisions holding "most efficient" as one reasonable interpretation of the "best" regulatory 

approach and holding that EPA may consider costs in allocating the "amounts" of crossboundary pollution that states must mitigate. EPA should have ample discretion to interpret 

Section 111's broad terms as consistent with a flexible, cost-benefit calibrated, market 

mechanism.

Commenters said, "system" is, as EPA suggests, anything that reduces emissions from affected 

sources, and need not be technological. Commenters said, furthermore, flexible compliance 

mechanisms have been "adequately demonstrated," as EPA has successfully implemented 

multiple market-based systems.

Commenters stated, an efficient market for power plants' greenhouse pollution, with an 

emissions cap set by cost-benefit analysis, would optimally balance EPA's criteria for the "best 

system": total emissions reductions, reasonableness of costs, promotion of technological 

development, and maintenance of grid reliability. Commenters said it would maximize net 

benefits because regulated entities could prioritize the lowest-cost abatement opportunities first, 

and would require them to abate only up to the point where marginal costs equal marginal 

benefits. Commenters said, the cap would also guarantee that a specified level of emissions 

reductions will be achieved and easily verified. Commenters said, by generating auction revenue 

that states can redistribute back to consumers or invest in improving energy efficiency, reducing 

energy demand, and upgrading the grid. 

Commenters further stated, Executive Orders prescribe that, when not prohibited by statute, 

agency regulations should strive to maximize net benefits and utilize efficient, flexible 

compliance options. 
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Response 3: While the commenters have suggested that the EPA has the authority for a 

theoretical alternative approach that would have the EPA determine that a trading program is the 

BSER, they have not made the case that the approach the EPA took to determining the BSER is 

impermissible or that the EPA is required to select a trading program as the BSER. The basis for 

the EPA’s determination of the BSER is set forth in the final rule preamble (see Section V), as 

well as in the Legal Memorandum and other rulemaking documents. Furthermore, the 

commenters present only a theoretical alternative approach to BSER; they fail to provide enough 

specificity for the EPA to follow their approach. They do not suggest or provide data to support 

the appropriate level for state budgets, nor do they explain whether the information and 

methodologies exist to determine accurately the point at which marginal costs equal marginal 

benefits. Section 111 does not require the EPA to maximize net benefits or to set the BSER at the 

point where marginal costs equal marginal benefits. The EPA has appropriately taken cost into 

account as required by Section 111, as explained in the final rule preamble (Section V.) and other 

rulemaking documents. 

The EPA agrees with the commenters that flexible compliance mechanisms, such as trading 

programs, have been adequately demonstrated. In fact, the EPA notes that emissions trading is an 

integral part of our BSER analysis. Furthrmore, many of the advantages of a trading program 

noted by the commenters are focused on the benefits that would accrue from state adoption of 

trading programs, not from determining that a trading program is the BSER. Among states’ 

options for 111(d) plans are the use of either a mass-based or rate-based trading program. The 

final rule greatly facilitates flexibility for EGUs by establishing a basis for states to set tradingbased emission standards and compliance strategies. The EPA has included in the final rule both 

mass-based state goals (in addition to rate-based goals) and source-level emission performance 

rates for the two subcategories of sources. These pave the way for states to implement massbased trading, as some states have requested. In fact, these additions, together with the model 

rules and federal plan being proposed concurrently with this rule, should demonstrate the relative 

ease with which states can adopt mass-based trading programs, including interstate mass-based 

programs that lend themselves to the kind of interstate compliance strategies so well suited for 

integration with the current interstate operations of the overall utility grid.

Comment 4: Commenters expressed support for a BSER based on emissions trading. 

Commenters stated, the proposed rule should set a mass-based emission cap rather than a carbon 

intensity standard and prohibit states from establishing rate based standards. Commenters said, 

"state flexibility" is not one of the criteria EPA must consider in determining BSER and setting 

an emission standard. Commenters said, while the D.C. Circuit has acknowledged EPA has "a 

great degree of discretion" in balancing various factors to set BSER, the bottom line is that 

BSER cannot be "best" if [it] create[s] greater problems than [it] solve[s]." Commenters said, 

further, the D.C. Circuit has found that there is "no sensible interpretation of the statutory word 

'best'" that does not "incorporate the amount of air pollution as a relevant factor to be weighed 

when determining the optimal standard." Commenters said, it is clear that a rate-based standard 
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cannot assure that the rulemaking's target will be reached; that it necessitates unverifiable 

adjustments; that it incentivizes increased generation; and that it discourages RE and EE. 

Commenters said, such a system clearly cannot be "best." Commenters said, conversely, a massbased standard that functions as an emissions cap would require no adjustments and create 

immediately verifiable emission reductions. 

Response 4: This rule allows, but does not require, states to adopt mass-based trading programs. 

See discussion in sections VII. and VIII. in the final rule preamble. The EPA disagrees with the 

commenters’ position that rate-based standards cannot be the “best” system of emission 

reductions. To the contrary, the majority of standards the EPA has issued under section 111 are 

rate-based standards. The EPA agrees that the amount of air pollution to be reduced is a relevant 

factor in determining the BSER, and the EPA has considered it in the BSER determination for 

this rule, as explained in section V and elsewhere in the preamble. The EPA disagrees that it is 

required to set a mass-based emission cap as the BSER.

Comment 5: Mass-based allowance trading is consistent with the CAA.

Commenters said, Congress in 1990 removed the word "technology" from the section 111(a) 

definition of "performance standards," indicating that the application of specific technologies is 

not a requirement of section 111. Commenters said, while that in no way reduces the technologyforcing nature of section 111 performance standards, it does provide support for existing source 

standards based on "systems" of emission reduction that go beyond the application of sourcespecific control technology requirements.

Response 5: See EPA’s discussion of the legal basis for emissions trading in state plans in 

sections III.B, V.B and VIII.C.6 of the final rule preamble of the CPP for EPA’s response to this 

comment.

Comment 6: Commenters stated, while EPA encourages states to devise market-based 

compliance programs, especially on a regional basis, it does not explain how this approach could 

meet the requirements of its proposed section 111(d) program, or how such a program would 

work on a practical level. Commenters said, without providing such information, EPA's proposal 

lacks support and fails to provide any opportunity for meaningful comment. Commenters said, 

issues that EPA has failed to address in order to provide a supportable basis for its position that 

market-based systems can satisfy its proposed rule include the following:

• How would a regional program such as RGGI be implemented as a federally enforceable 

program under section 111(d)? The compliance obligations under the proposed rule are 

imposed on affected entities, but a regional cap and trade program such as RGGI would 

be implemented through a regional emission budget imposing regional obligations on 

states.
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• In this regard, would a regional market-based program have to ensure that each affected 

unit actually reduces emissions, or would affected units not have to be controlled if the 

regional budget were met? What sectors could contribute to those reductions (note that, in 

California, sectors beyond the electric utility industry can contribute to reductions)?

• How would a regional mass emission target be calculated from state rate-based targets? 

How would an emissions intensity-based emissions trading program work? Several 

interpretations have been advanced under the current proposal, not all of which would be 

compatible with RGGI.

• If the basic conversion of a rate-based target to a mass-based target is Emission Rate 

(lbs/MWh) * Generation (MWh) = Mass Emissions (tons), how is future generation 

incorporated to calculate future year targets?

• At what point will EPA approve a regional mass-based target proposed by states? 

Modeling and determining a mass-based goal is a significant, resource-intensive 

undertaking. In addition, because a regional target will impact states in a region 

differently, designing and negotiating such a system can take years (as was the case with 

RGGI). Will there be any guidance that states can use to ensure that a negotiated massbased target will be approved?

• In a regional or multi-state mass-based trading program, if one state fails to meet its 

targets, how will the other states be affected? Will the entire region and all its industries 

be out of compliance? How would enforcement work in a regional program?

Response 6: The EPA provided adequate notice as required under section 307 of the Clean Air 

Act of issues related to the treatment of regional programs in the proposal, the November 

Supplemental Proposal, the November NODA and the supporting TSDs, including the TSD titled 

“Translation of the Clean Power Plan Emisson Rate-Based CO2 Goals to Mass-Based 

Equivalents.” The extensive and thoughtful comments filed on these issues is evidence that the 

issues were adequately noticed. 

These emission guidelines provide states with significant flexibility in designing section 111(d) 

plans, particularly the ability to follow a state measures approach. California and RGGI states 

have indicated that they intend to maintain their current state programs, which this rule would 

allow. 

EPA has provided a supportable basis for its position that market-based systems can satisfy its 

proposed rule. See sections VIII.A and VIII.C.1 of the final rule preamble of the CPP for an 

overview on emissions trading in state plans under the CPP, and section VIII.C.6 of the final rule 

preamble for a discussion of legal and enforceability issues associated with emissions trading in 

state plans. See sections VIII.J.2 and VIII.J.3 of the final rule preamble of the CPP for EPA’s 

response to this comment regarding emissions budget trading programs with broader source 

coverage and flexible features such as RGGI, multi-state coordination among emission budget 
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trading programs, and mass-based “trading-ready” programs. See section VIII.C.5 of the final 

rule preamble for information on multi-state plans. Additional information on EPA plan approval 

is provided in section VIII.E of the final rule preamble. General information on development of 

guidance documents for multi-state plan development is referenced in section VIII.H of the final 

rule preamble. See section VII.C of the preamble and CO2 Emission Performance Rate and Goal 

Computation TSD sections 3, 5 and 6 for information on converting category-specific 

performance rates into mass goals. Specifically, EPA’s computation of the mass goals allows for 

increased generation consistent with the performance rates, as detailed in section VII.C of the 

preamble. With respect to a mass-based goal proposed by a state or states, EPA is not allowing 

states to propose their own goals, although states can submit programs that achieve more CO2

emission reductions than the minimum goals in these emission guidelines. Thus the concern 

about resource burden in modeling and negotiating a regional mass-based target does not exist. 

Comment 7: Section 111(d) does not allow cap and trade. 

Commenters stated, Congress did not allow EPA to promulgate a section 111(d) rule that allows 

emissions trading between an existing source and other existing sources or from nonaffected 

sources. Commenters said, section 111(d) specifically requires standards of performance "for any 

existing source,” on a source-specific basis, and limits the term to only stationary sources subject 

to the rule.

Commenters said, EPA rationalizes that "for" could apply to renewable energy and demand side 

energy efficiency decreases that would result in degreased generation at EGUs (federally 

enforceable requirements on third parties that directly reduce emissions at EGUs); however, 

EPA's interpretation of "for" does not support using offsets or allowances as part of a cap and 

trade system.

Commenters said, EPA states that cap and trade meets the standard of performance definition (is

a continuous emission reduction) "because, in the case of a tradable emission rate, the rate is 

applicable at all times, and, in the case of a tradable mass limit, the source is always under the 

obligation that its emissions be covered by allowances." Commenters said, EPA ignores the fact 

that the emission reductions come from another source (even potentially non-EGUs) and the 

Act's language, which does authorize trading as a standard of performance.

Commenters said, the plain language demonstrates that Congress wanted standards of 

performance for "any" existing EGU, and not to establish a trading program. Commenters said, 

where Congress has opted for a trading program (in the Acid Rain Program and for 

nonattainment New Source Review) Congress has expressly done so. Commenters said, 

alternatively, to the extent that "standard of performance" is ambiguous, which it is not, 

Congress expressly limited the term to only stationary sources subject to the rule.
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Response 7: EPA disagrees with the comment that states cannot use a trading program to set 

standards of performance for EGUs in compliance withsection 111. For EPA’s response to this 

comment see sections III.B, V.B and VIII.C.6 of the final rule preamble of the CPP.

Furthermore, contrary to commenters’ assertion, the EPA is not allowing emission reductions 

from non-EGUs (e.g., out-of-sector offsets) to count towards whether a state or an EGU has met 

its obligations under section 111. As explained in the final rule preamble (especially section 

V.B.3.c.), the EPA interprets section 111 as imposing the constraint that the BSER must be based 

on achieving the requisite emission reductions from the affected sources. Similarly, we interpret 

section 111 as requiring state plans that will have the effect of reducing emissons from the 

affected source category. Accordingly, actions taken by affected sources (or other entities) that 

do not result in emission reductions from the affected source category (e.g, “out-of-sector” 

carbon offsets) can not qualify for inclusion in the BSER and cannot be used to determine 

whether a state is meeting its goal. But see the discussion in final rule preamble section VIII.J. 

of state coverage of new sources in a state mass-based plan to guard against leakage. 

1.10.10 BSER based on emissions averaging

1.10.11 Other

Comment 1: Commenters argued that if EPA finalizes the proposed BSER definition under 

Section 111(d) and includes Building Blocks 2, 3 and 4, it would have significant implications 

for the regulation of new EGU sources under section 111(b). Commenters argued that EPA is 

obligated to review, and if appropriate, revise the standards applicable to new sources under 

Section 111(b) every 8 years, and if EPA finalizes its proposed broad regulatory definition of 

BSER under Section 111(d), there would be nothing to keep EPA from applying the Section 

111(d) definition of BSER to Section 111(b), applicable to new units, under the 8-year review. 

Commenters argued that applying the broader definition of BSER in 111(d) to 111(b) would 

enable EPA to preclude the construction of any new generation unless, and until, the state has 

maximized dispatch of natural gas EGUs and exhausted a wide range of other, non-generation 

options that could include additional energy efficiency measures, new renewable energy 

requirements, and non-electric utility actions such as discouraging new industrial development, 

imposing building standards or any number of other measures that have nothing to do with 

electricity generation. Commenters argued that EPA is saying, essentially, the best technology 

available to reduce new gas plants emissions is to "redefine" the source, thereby forcing utilities 

to invest in more expensive resources that might not meet their integration needs.

Response 1: We disagree with these comments. It is premature to attempt to anticipate the type 

of BSER that the EPA may determine for new affected EGUs during the next 8-year review. For 
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example, it is possible that CCS may be less expensive by then. We respond elsewhere to 

“redefining the source” arguments.